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RECtiVhii '^EDERAL ELCCIION

COMMISSION FEDERAL ELECTION COMMISSION

999 E Street, N.W. 2|))i, , Q Washington, B.C. 20463 fllHU. bJ

FIRST GENERAL COUNSEL'S REPORT CELA

COMPLAINANTS:

RESPONDENT:

RELEVANT STATUTES AND REGULATIONS:

INTERNAL REPORTS CHECKED:

FEDERAL AGENCIES CHECKED:

MUR: 6596 DATE COMPLAINT FILED: 6/20/2012 DATE OF NOTIFICATION: 6/21/2012 DATE OF LAST RESPONSE: 3/20/2013 DATE ACTIVATED: 10/9/2012

EXPIRATION OF SOL: 1/11/2017 ELECTION CYCLE: 2012

Obama for America Democratic National Committee

Crossroads Grassroots Policy Strategies

2U.S.C.§431(4) 2U.S.C.§432 2 U.S.C. § 433 2 U.S.C. § 434 26 U.S.C. § 501(c) IIC.F.R. §100.22

Disclosure Reports

Internal Revenue Service

MUR 6596 (Crossroads GPS) General Counsel's Report Page 2 of34

1 TABLE OF CONTENTS

2

3 1. INTRODUCTION 3

4 II. FACTUAL AND LEGAL ANALYSIS 4

5 A. Facts V.;, ^4

6 1. Crossroads GPS 4

7 2. Crossroads GPS's 2012 Activities : 5

8 B. Analysis 6

9 1. The Test for Political Committee Status 6

10 a. The Commission's Case-By-Case Approach to Major Purpose 7

11 b. Challenges to the Commission's Major Purpose Test and the

12 Supplemental E&J 8

13 c. Organizational and Reporting Requirements for Political

14 Committees ; 11

15 2. Application of the Test for Political Committee Status to

16 Crossroads GPS 13

17 a. Statutory threshold 13

18 b. Major Purpose 13

19 C. Conclusion ,...,32

20 III. PROPOSED DISCOVERY 33

21 IV. RECOMMENDATIONS 34

22

23

MUR 6596 (Crossroads GPS) General Counsel's Report Page 3 of34

1 I. INTRODUCTION 2 3 This matter involves allegations that Crossroads Grassroots Policy Strategies

4 ("Crossroads GPS") violated the Federal Election Campaign Act of 1971, as amended, (the

5 "Act") by failing to organize, register, and report as a political committee in 2012. See Compl. at

6 1-2 (June 20,2012).

7 Crossroads GPS acknowledges making and reporting expenditures exceeding the Act's

8 $1,000 threshold for political committee status. Resp. at 8-9 (Aug. 9,2012); see 2 U.S.C.

9 § 431(4). Crossroads GPS argues, however, that it is not a political committee under the Act

10 because it lacks the requisite major purpose: the nomination or election of a federal candidate.

11 Resp. at 9. Crossroads GPS's argument rests on the assertion that the advertisements identified

12 in the Complaint, along with many of its other advertisements, are not express advocacy, id. at

13 18-22, and that its major purpose is "advancing its policy and legislative agenda through

14 grassroots communications and outreach," id. at 9. In our view, the argument is wide of the

15 mark.

16 As discussed below, the available information regarding Crossroads GPS's overall conduct

17 in 2012 supports a finding that there is reason to believe that Crossroads GPS had as its major

18 purpose the nomination or election of federal candidates. Accordingly, we recommend that the

19 Commission find reason to believe that Crossroads GPS violated 2 U.S.C. §§ 432,433, and 434

20 by failing to organize, register, and report as a political committee, and authorize an

21 investigation.

22

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 4 of34

1 II. FACTUAL AND LEGAL ANALYSIS

2 A. Facts

3 1. Crossroads GPS

4 Crossroads GPS is a non-profit coiporation that was founded on June 1,2010. Resp., Ex..

5 D. It applied for SO 1(c)(4) status as a social welfare organization in September 2010; the

6 Internal Revenue Service ("IRS") has yet to act on its application. Crossroads GPS's current

7 officers and directors are Steven Law (President), Steven Duffield (Vice President for Policy),

8 Sally Vastola (Secretary and Board Member), Bobby Burchfield (Chairman), and Jonathan

9 Collegio (Communications Director). See http://www.crossroadsgps.org/leadershiD-team.

10 Crossroads GPS' s Articles of Incorporation state that it "is established primarily to

11 further the common good and general welfare of the citizens of the United States of America."

12 Resp., Ex. D. Crossroads GPS's 2011 Tax Return, submitted as an attachment to the Response,

13 describes its mission as:

14 Advocat[ing] policy outcomes on pending legislative and regulatory issues 15 such as: health care reform, taxes, spending and deficits. Congressional 16 reform and energy and environment. The purpose of these issue advocacy 17 and grassroots lobbying activities is to promote policies that strengthen the 18 nation's economy, reduce regulation of private sector activity, and restore 19 government to a sound financial footing. 20 21 See Resp., Ex. D; 2011 Tax Return at 1, Schedule O.

22 According to its Articles of Incorporation, to further its stated mission Crossroads GPS

23 "engag[es] in research, education, and communication efforts regarding policy issues of national

24 importance that will impact America's economy and national security in the years ahead."

25 Resp., Ex. D. On its website. Crossroads GPS states that it is "dedicated to holding

26 Washington's feet to the fire on the practical issues that will actually improve our country and

27 our lives." See http://www.crossroadsgps.org/about. In its Response, Crossroads GPS states t^t

MUR 6596 (Crossroads GPS) General Counsel's Report Page 5 of34

1 its major purpose is "advancing its policy and legislative agenda through grassroots 4

2 communications and outreach." Resp. at 9.

3 2. Crossroads GPS's 2012 Activities 4 5 Crossroads GPS estimates that it spent $188,886,899 during calendar year 2012. Supp.

6 Resp. at 9 (Mar. 20,2013). The group reported spending $70,968,864 on independent

7 expenditures in 2012, October 2012 Quarterly Report at 1 (October IS, 2012) ($20,558,081);

8 Year-End 2012 Report at 1 (January 15,2013) ($50,410,783).' It also reported spending

9 $192,973 on two electioneering commimications ("Every Level" and "Deflect"). FEC Form 9 at

10 1 (February 22,2012) ($40,401); FEC Form 9 at 1 (February 23,2012) ($31,218); FEC Form 9

11 at 1 (February 23,2012 ($3,049); FEC Form 9 at 1 (March 22,2012) ($118,305).

12 Crossroads GPS states that the following 2012 activities furthered its exempt purpose:

13 • Submitting Freedom of Information Act requests and subsequently posting the 14 documents on www.wikicountability.org. 15 16 • Providing "endorsements and policy commentary" on a variety of "regulatory 17 activities, policy proposals, and other current events." 18 19 • Creating two websites for citizens to contact their representatives. 20 21 • Distributing a series of email newsletters ("Issue Directions") to supporters. 22 23 • Giving grants to section 501(c)(4) organizations for activities consistent with each 24 organization's exempt purpose. 25 26 • Co-hosting policy forums entitled "How Does the Executive Branch's Abuse of 27 Power Threaten Our Economy?" and "ObamaCare: Then and Now."

' In its Supplemental Response, Crossroads GPS includes only the figure from the Year-End 2012 Report ($50,410,783) in calculating its total independent expenditures for 2012. Supp. Resp. at 9. This report covers only-independent expenditures made by Crossroads GPS from October 1 to December 31,2012. Crossroads GPS, however, also reported spending $20,558,08Ion independent expenditures from July 1,2012 to September 30,2012.

^ Crossroads GPS states that "[g]rants are accompanied by a letter of transmittal stating that the funds are to be used only for tax-exempt function purposes of the grantee organization and not to be used in connection with any political or non-exempt activity." Resp., Ex. E.

i

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 6 of34

1 2 • Producing and airing ads that do not contain express advocacy or its functional 3 equivalent, including December 2012 ads^ related to the "fiscal cliff' 4 negotiations. 5 6 Resp., Ex. E;. Supp. Resp. at 7. 7 8 Crossroads GPS argues that all of this activity shows that it does not have as its major

9 purpose the nomination or election of federal candidates, and therefore it is not a political

10 committee under the Act and Commission regulations.

11 B. Analysis

12 1. The Test for Political Committee Status

13 The Act and Commission regulations define a "political committee" as "any committee,

14 club, association or other ^oup of persons which receives contributions aggregating in excess of

15 $ 1,000 during a calendar year or which makes expenditures aggregating in excess of $ 1,000

16 during a calendar year." 2 U.S.C. § 431(4)(A); 11 C.F.R. § 100.5. In Buck/e}' v. Va/eo, 424 U.S.

17 1 (1976), the Supreme Court held that defining political committee status "only in terms of the

18 annual amotmt of 'contributions' and 'expenditures'" might be overbroad, reaching "groups

19 engaged purely in issue discussion." Id. at 79. To cure that infirmity, the Court concluded that

20 the term "political committee" "need only encompass organizations that are under the control of

21 a candidate or the major purpose of which is the nomination or election of a candidate." Id.

22 (emphasis added). Accordingly, under the statute as thus construed, an organization that is not

23 controlled by a candidate must register as a political committee only if (1) it crosses the $ 1,000

24 threshold and (2) it has as its "major purpose" the nomination or election of federal candidates.

^ Crossroads GPS spent $500,000 to air "Over" and $240,000 to air "Balanced" during December 2012. htlp://www.crbssroadsgps.org/20l2/l2ycroMrdads-aps-launches-new-tv-ad-critici2ingrobaina.s-lacl{-oF-balance-in-fiscal-cliff-talks/: hltp://www.crossroadsgps.org/2012/12/crossroads-gps-launches-new-radio-ads-urging-senators-to-suDPort-a-trulv-balanced-fiscal-cliff-Dlan/.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 7 of34

1 a. The Commission's Case-By-Case Approach to Major Purpose

2 Although Buckley established the major purpose test, it provided no guidance as to the

3 proper approach to determine an organization's major purpose. See, e.g.. Real Truth About

4 Abortion, Inc. v. FEC, 681 F.3d 544, 556 (4th Cir. 2012), cert, denied, 81 U.S.L.W. 3127 (U.S.

5 Jan. 7,2013) (No. 12-311) {"RTAA"). The Supreme Court's discussion of major purpose in a

6 subsequent opinion, Massachusetts Citizens for Life v. FEC, 479 U.S. 238 (1986) {"MCFL"),

7 was similarly sparse. See id. at 262. In that case, the Court identified an organization's

8 independent spending as a relevant factor in determining an organization's major purpose, but

9 examined the entire record as part of its analysis and did not chart the outer bounds of the test.

10 Id. Following Buckley and MCFL, lower courts have refined the major purpose test — but only

11 to a limited extent.'^ In large measure, the contours of political committee status — and the

12 major purpose test — have been left to the Commission.®

13 Following Buckley, the Commission adopted a policy of determining on a case-by-case

14 basis whether an organization is a political committee, including whether its major purpose is the

15 nomination or election of federal candidates. Political Committee Status, 72 Fed. Reg. 5595

16 (Feb. 7,2007) (Supplemental Explanation and Justification). The (Commission has periodically

17 considered proposed rulemakings that would have determined major purpose by reference to a

^ See FEC v. Machinists Non-Partisan Political League, 655 F.2d 380, 396 (D.C. Cir. 1981) (stating that political committee "contribution limitations did not apply to... groups whose activities did not support an existing 'candidate'" and finding Conunission's subpoena was overly intrusive vvhere directed toward "draft" group lacking a "candidate" to support); FEC v. GOPAC, Inc., 917 F. Supp. 851, 861-62 (D.D.C. 1996) (holding that a group's support of a "farm team" of future potential federal candidates at the state and local level did not make it a political committee under the Act); see also UnityOS v. FEC, 596 F.3d 861, 869 (D.C. Cir. 2010) (concluding that an organization "is not subject to regulation as a political committee unless and until it selects a 'clearly identified' candidate").

' Like other administrative agencies, the Commission has the inherent authority to interpret its statute through a case-by-case approach. See SEC v. Chenery Corp., 332 U.S. 194,202-03 (1947) C'[T]he choice made between proceeding by general rule or by individual... litigation is one that lies primarily in the informed discretion of the administrative agency.").

MUR 6396 (Crossroads GPS) General Counsel's Report Page 8 of34

1 bright-line rule — such as proportional (/. e., 50%) or aggregate threshold amounts spent by an

2 organization on federal campaign activity. But the Commission consistently has declined to

3 adopt such bright-line rules. See Independent Expenditures; Corporate and Labor Organization

4 Expenditures, 57 Fed. Reg. 33,548,33,558-59 (July 29,1992) (Notice of Proposed Rulemaking);

5 Definition of Political Committee, 66 Fed. Reg. 13,681,13,685-86 (Mar. 7, 2001) (Advance

6 Notice of Proposed Rulemaking); see also Summary of Comments and Possible Options on the

7 Advance Notice of Proposed Rulemaking on the Definition of "Political Committee,"

8 Certification (Sept. 27,2001) (voting 6-0 to hold proposed rulemaking in abeyance).

9 In 2004, for example, the Commission issued a notice of proposed rulemaking asking

10 whether the agency should adopt a regulatory definition of "political committee." See Political

11 Committee Status, 69 Fed. Reg. 11,736,11,745-49 (Mar. 11,2004) (Notice of Proposed

12 Rulemaking). The Commission declined to adopt a bright-line rule, noting that it had been

13 applying the major purpose test "for many years without additional regulatory definitions," and

14 concluded that "it will continue to do so in the future." See Political Committee Status,.

15 Definition of Contribution, and Allocation for Separate Segregated Funds and Nonconnected

16 Committees, 69 Fed. Reg. 68,056,68,064-65 (Nov. 23,2004) (explanation and justification).

17 b. Challenges to the Commission's Major Purpose Test and the 18 Supplemental £& J 19 20 When the Commission's 2004 decision not to adopt a regulatory definition was

21 challenged in litigation, the court rejected plaintiffs' request that the Commission initiate a new

22 rulemaking. Shays v. FEC, 424 F. Supp. 2d 100,117 (D.D.C. 2006) ("Shays F). The district

23 court found, however, that the Commission had "failed to present a reasoned explanation for its

24 decision" to engage in case-by-case decision-making, rather than rulemaking, and remanded the

25 case to the Commission to explain its decision. Id. at 116-17.

MUR 6596 (Crossroads GPS) General Counsel's Report -Page 9 of34

1 Responding to the remand, the Commission issued a Supplemental Explanation and

2 Justification for its final rules on political committee status to further explain its case-by-case

3 approach and provide the public with additional guidance as to its process for determining

4 political committee status. Political Committee Status, 72 Fed. Reg. 5595 (Feb. 7,2007)

5 ("Supplemental E&J"). The Supplemental E&J explained that "the major purpose doctrine

6 requires fact-intensive analysis of a group's campaign activities compared to its activities

7 unrelated to campaigns." Id. at 5601-02. The Commission concluded that the determination of

8 an organization's major purpose "requires the flexibility of a case-by-case analysis of an

9 organization's conduct that is incompatible with a one-size fits-all rule," and that "any list of

10 factors developed by the Commission would not likely be exhaustive in any event, as evidenced

11 by the multitude of fact patterns at issue in the Commission's enforcement actions considering

12 the political committee status of various entities." Id.

13 To determine an entity's "major purpose," the Commission explained that it considers a

14 group's "overall conduct," including public statements about its mission, organizational

15 documents, government filings (e.g., IRS notices), the proportion of spending related to "federal

16 campaign activity," and the extent to which fundraising solicitations indicate funds raised will be

17 used to support or oppose specific candidates. Id. at 5597,5605. Among other things, the

18 Commission informed the public that it compares how much of an organization's spending is for

19 "federal campaign activity" relative to "activities that [a]re not campaign related." Id. at 5601,

20 5605 (emphasis added).

21 To provide the public with additional guidance, the Supplemental E&J referenced

22 enforcement actions on the public record, as well as advisory opinions and filings in civil

23 enforcement cases following the 2004 rulemaking. Id. at 5604-05. The Commission noted that

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 10 of 34

1 the settlements in several MURs involving section 527 organizations "provide considerable

2 guidance to all organizations" regarding the application of the major purpose test and "reduce

3 any claim of uncertainty because concrete factual examples of the Committee's political

4 committee analysis are now part of the public record." Id. at 5595,5604.

5 After the Conunission issued the Supplemental E&J, the iShnys 7 plaintiffs again

6 challenged, under the Administrative Procedure Act, 5 U.S.C. §§ 551-59, the Commission's

7 case-by-case approach to political committee status. The court rejected the challenge, upholding

8 the Commission's case-by-case approach as an appropriate exercise of the agency's discretion.

9 Shays v. FEC, 511 F. Supp. 2d 19,24 (D.D.C. 2007) ("Shays 77'). The court recognized that "an

10 organization... may engage in many non-electoral activities so that determining its major

11 purpose requires a very close examination of various activities and statements." Id. at 31.

12 Recently, the Fourth Circuit rejected a constitutional challenge to the Commission's case-

13 by-case determination of major purpose. The court upheld the Commission's approach, finding

14 that Buckley "did not mandate a particular methodology for determining an organization's major

15 purpose," and so the Commission was free to make that determination "either through

16 categorical rules or through individualized adjudications." RTAA, 681 F.3d at 556. The court

17 concluded that the Commission's case-by-case approach was "sensible,... consistent with

18 Supreme Court precedent and does not unlawfully deter protected speech." Id. at 558.® The

' The RTAA court rejected an argument — similar to the one made by Crossroads GPS here — that the major purpose test must be confined to "(1) examining an organization's expenditures to see if campaign-related speech amounts to S0% of all expenditures; or (2) reviewing 'the organization's central purpose revealed by its organic documents.'" RTAA, 681 F.3d at 555. The Fourth Circuit recognized that determining an organization's major purpose "is inherently a comparative task, and in most instances it will require weighing some of the group's activities against others." Id. at 556; see also Koerber v. FEC, 483 F. Supp. 2d 740 (E.D.N.C. 2008) (denying preliminary relief in challenge to Commission's approach to determining political committee status, and noting that "an organization's 'major purpose' is inherently comparative and necessarily requires an understanding of an organization's overall activities, as opposed to its stated purpose"); FEC v. Malenick,3lO F. Supp. 2d 230,234-37 (D.D.C. 2004) (considering organization's statements in brochures and alerts" sent to potential and actual contributors, as well as its spending influencing federal elections); FEC v. GOPAC, Inc., 917 F. Supp. 851, 859

MUR 6596 (Crossroads GPS) General Counsel's Report Page 11 of34

1 Fourth Circuit concluded that the Supplemental E&J provides "ample guidance as to the criteria

2 the Commission might consider" in determining an organization's political committee status and

3 therefore is not unconstitutionally vague. Id.\ see Free Speech v. FEC, 720 F.3d 788 (10th Cir.

4 2013) (quoting RTAA and upholding Commission's case-by-case method of determining political

5 committee status), petition for cert, filed (No. 13-772).'

6 c. Organizational and Reporting Requirements for Political j[ 7 Committees § 8 0 9 Political committees — commonly known as "PACs" — must comply with certain

n ' 10 organizational and reporting requirements set forth in the Act. PACs must register with the

11 Commission, file periodic reports for disclosure to the public, appoint a treasurer who maintains

12 its records, and identify themselves through "disclaimers" on all of their political advertising, on

13 their websites, and in mass e-mails. See 2 U.S.C. §§ 432-34; 11 C.F.R. §110.1I(a)(l).®

14 In the wake of the Supreme Court's decision in Citizens United v. FEC, 130 S. Ct. 876

15 (2010), which struck down the Act's prohibitions on corporate independent expenditures and

16 electioneering communications, the D.C. Circuit held in SpeechNow that political committees

(D.D.C. 1996) ("The organization's purpose may be evidenced by its public statements of its purpose or by other means, such as its expenditures in cash or in kind to or for the benefit of a particular candidate or candidates."); id at 864, 866 (applying a fact-intensive inquiry, including review of organizations' meetings attended by national leaders and organization's "Political Strategy Campaign Plan and Budget," and concluding that organization did not have as its major purpose the election of federal candidates).

' The Supreme Court's decision in FCC v. Fox Television Stations, Inc. is not to the contrary. See 132 S. Ct. 2307,2317 (2012) ("[A] regulation is not vague because it may at times be difficult to prove an incriminating fact but rather because it is unclear as to what fact must be proved"). In that case, the FCC's indecency standard was held to be vague for lack of notice when it applied a new stricter standard, ex post facto, to the Fox defendants, and when it relied on a single "isolated and ambiguous statement" from a 50-year old administrative decision to support its finding of indecency against the ABC defendants. Id. at 2319. Here, in sharp contrast, the Supplemental E&J — which was issued several years before the conduct at issue — provides extensive guidance on the Commission's approach to major purpose and has withstood both APA and constitutional challenges. See Center for Individual Freedom v. Madigan, 697 F.3d 464 (7th Cir. 2012) ("Madigan") (rejecting vagueness challenge to the definition of "political committee" in the Illinois campaign finance statute).

' An organization must register as a political committee when it crosses the $ 1,000 threshold and determines, based on the guidance in the Supplemental E&J, that it has the requisite major piupose.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 12 of34

1 that engage only in independent expenditures are not subject to contribution limits.

2 SpeechNow.org v. FEC, 599 F.3d 686,696 (D.C. Cir. 2010) (:'SpeechNow"). These political

3 committees, often referred to as independent expenditure-only political committees or Super

4 PACs, continue to be subject, however, to the "minimal" reporting requirements of 2 U.S.C.

5 §§ 432,433, and 434(a), and the organizational requirements of 2 U.S.C. §§ 431(4) and 431(8).'

6 Id. at 697. These requirements, which promote disclosure, do not, of course, prohibit speech.

7 /?r.4^,681 F.3dat552n.3.

8 Notably, the Supreme Court has stressed that such requirements serve the vital role of

9 disclosure in political discourse. See Citizens United, 130 S. Ct. at 916 (recognizing that

10 increased "transparency" resulting from FECA disclosure requirements "enables the electorate to

11 make informed decisions and give proper weight to different speakers and messages"); Doe v.

12 Reed, 561 U.S. 186,130 S. Ct. 2811,2820 (2010) (holding that public disclosure of state

13 referendtim petitions serves important government interest of "promot[ing] transparency and

14 accountability in the electoral process," and "preserving the integrity of the electoral process");

15 see also Doe, 130 S. Ct. at 2837 (Scalia, J., concurring) ("Requiring people to stand up in public

16 for their political acts fosters civic courage, without which democracy is doomed."); Madigan,

17 697 F.3d at 490 (upholding Illinois's campaign finance disclosure provisions against

18 constitutional facial challenge, finding a substantial relation to "Illinois's interest in informing its

19 electorate about who is speaking before an election"). But of. Minn. Citizens for Life, Inc. v.

20 Swanson, 692 F.3d 864,876 (8th Cir. 2012) (striking down certain registration and disclosure

21 provisions of Minnesota's campaign finance law, finding that those obligations as applied to

' Super PACs are also subject to certain source restrictions, such as prohibitions on contributions irom foreign nationals (2 U.S.C. § 441e) and federal contractors (2 U.S.C. § 441c).

MUR 6596 (Crossroads GPS) General Counsel's Report Page 13 of 34

1 associations that do not meet Buckley's "major purpose test" are unduly burdensome and do not

2 match any "sufficiently important disclosure interest").

3 2. Application of the Test for Political Committee Status to Crossroads GPS

4 a. Statutory Threshold 5 6 To assess whether an organization has made an "expenditure," the Commission "analyzes

7 whether expenditures for any of an organization's communications made independently of a

8 candidate constitute express advocacy either under 11 C.F.R. § 100.22(a), or the broader

9 definition at 11 C.F.R. § 100.22(b)." Supplemental E&J at 5606. Crossroads GPS reported

10 spending $70,968,864 on independent expenditures in 2012. See supra siS. Thus, Crossroads

11 GPS far exceeded the $1,000 statutory threshold for political committee status. See 2 U.S.C.

12 § 431(4)(A); 11 C.F.R. § 100.5.

13 b. Major Purpose 14 15 Crossroads GPS states in its responses and on its website, and in its tax returns, that its

16 major purpose is not federal campaign activity, but rather "advancing its policy and legislative

17 agenda through grassroots communications and outreach." Resp. at 9; Supp. Resp. at 7-8;

18 http://www.crossroadsgDS.ore/about/. The Commission noted in the Supplemental E&J that it

19 may consider such statements in its analysis of an organization's major purpose. Supplemental

20 E&J at 5606, but that such statements are not necessarily dispositive. See Real Truth About

21 Obama v. FEC, No. 3:08-cv-00483,2008 WL 4416282, at *14 (E.D. Va. Sept. 24,2008) ("A

22 declaration by the organization that they are not [organized] for an electioneering purpose is not

23 dispositive.") (emphasis in original, alteration added), aff'd, 575 F.3d 342 (4th Cir. 2009),

24 vacated on other grounds, 130 S. Ct. 2371 (2010), remanded and decided, 796 F. Supp. 2d 736,

25 affirmed sub nom. Real Truth About Abortion v. FEC, 681 F.3d 544 (4th Cir. 2012), cert, denied.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 14 of34

1 81 U.S.L.W. 3127 (U.S. Jan. 7,2013) (No. 12-311). Under the Commission's case-by-case

2 approach, the Commission considers the organization's "overall conduct," including its

3 disbursements, activities, and statements. Supplemental E&J at SS97. In this case. Crossroads

4 GPS's proportion of spending related to federal campaign activity is alone sufficient to establish

5 that its major purpose in 2012 was the nomination or election of federal candidates.

6 Crossroads GPS reported spending $70,968,864 on independent expenditures in 2012. In

9 7 addition, as described below, the available information indicates that Crossroads GPS spent at

^ 8 least $67,678,000 in 2012 on communications that support or oppose a clearly identified Federal

g 9 candidate, but do not contain express advocacy. In past enforcement actions, the Commission

10 has determined that funds spent on communications that support or oppose a clearly identified

11 federal candidate, but do not contain express advocacy, should be considered in determining

12 whether that group has federal campaign activity as its major purpose.'"

13 For example, the Commission has relied, in part, on the following advertisements in

14 determining that an entity was a political committee:

15 • "Child's Pay": The advertisement contains "images of children performing 16 labor-intensive jobs: washing dishes in a restaurant kitchen, vacuuming a hotel 17 hallway, working on an assembly line in a factory, collecting garbage, working at

" See Conciliation Agreement KIV. 11, MUR 5754 (MoveOn.org Voter Fund) (relying on funds used for advertisements that "opposed" or "criticized" George W. Bush to establish political committee status); Factual and Legal Analysis at 2, MUR 5753 (League of Conservation Voters 527) (finding major purpose satisfied where funds spent on door-to-door and phone bank express advocacy campaign, and aiso on advertisements "supporting or opposing clearly identified federal candidates, some of which contained express advocacy"); Conciliation Agreement ̂ IV. 14, MUR 5487 (Progress for America Voter Fund) (concluding that PFA VF had met the major purpose test after spending 60% of its funds on communications that "praised George W. Bush's leadership as President and/or criticized Senator Kerry's ability to provide similar leadership"); see also Stipulation for Entry of Consent Judgment ^ 22, FEC v. Citizens Club for Growth, Inc., Civ. No. 1:05-01851 (Sept. 6,2007) (entering stipulation of Commission, approved as part of a consent judgment, where organization was treated as a political committee because "the vast majority of [the group's disbursements] were made in connection with federal elections, including, but not limited to, ftmding for candidate research, polling, and advertisements and other public communications referencing a clearly identified federal candidate").

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 15 of34

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an auto repair shop, and checking groceries," and concludes with the question: "Guess who's going to pay off President Bush's $1 trillion deficit?""

"70 Billion More": The advertisement shows images of a young boy sitting at a school desk and a young girl with a thermometer in her mouth. The voice-over states: "We could build thousands of new schools, or hire a million new teachers. We could make sure every child has insurance. Instead, George Bush has spent $150 billion in Iraq and has a secret plan to ask for $70 billion more. But after four years it's now clear: George Bush has no plan for taking care of America. Face it. George Bush is not on our side.""

"Jobs": "Is George Bush listening to us? Since taking office, he's let oil and energy companies call the shots. Special exemptions from the Clean Water and Clean Air Acts. Halliburton collecting billions in no-bid contracts. Here in Wisconsin, 52,500 manufacturing jobs lost. America is going in the wrong direction. And George Bush just listens to the special interests.""

"Yucca You Decide": "Yucca Mountain. While everyone plays politics, who's looking out for Nevada? Eighty-five percent of the nuclear waste could come through Las Vegas. Past businesses. Through communities. By our schools. Accidents happen, and if so, how could Las Vegas, a city and economy built on tourism, recover? Who would come visit us then? The question: did George W. Bush really try and stop Yucca Mountain? Or was he just playing politics?""*

"Finish It": [On screen: Images of Mohammed Atta, Osama bin Laden, Khalid Sheik Mohammed, Nick Berg's killers, and victims of terrorist attacks.] "These people want to kill us. They killed hundreds of innocent children in Russia. Two hundred innocent commuters in Spain. And 3,000 innocent Americans. John Kerry has a 30-year record of supporting cuts in defense and intelligence and endlessly changed positions on Iraq. Would you trust Kerry against these fanatic killers? President Bush didn't start this war, but he will finish it.""

"Ashley's Story": This advertisement recounts the story of Ashley Faulkner, whose mother was killed in the September 11,2001, terrorist attacks, and the

" Factual and Legal Analysis at 3-4,12-13, MUR 5734 (MoveOn.Org Voter Fund). The full communication can be viewed at httD://www.voutube.com/watch?v=A9WKimKIvUO.

Id. at 4, 12-13. The full communication can be viewed at httD://archive.ore/details/movf70billionmorc.

" Factual and Legal Analysis at 5, 18, MUR 5753 (League of Conservation Voters 527). The full communication can be viewed at httP.7/archive.org/details/lcv jobs 102604.

" Id. at 5, 18. The full communication can be viewed at http://archive.0r2/details/lcv vucca decide.

Conciliation Agreement IV. 14, MUR 5487 (Progress for America Voter Fund). The full communication can be viewed at http://www.llviiiaroomcandidatc.oriB/coinmercials/2004/finish-.it.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 16 of34

1 interaction she had with President George W. Bush during a visit to Ohio. It 2 closes with Ashley Faulkner's father stating; "What I saw was what I want to see 3 in the heart and in the soul of the man who sits in the highest elected office in our 4 country."'® 5 6 The Commission found that each of these advertisements — though not express advocacy

7 — indicated that the respondents had as their major purpose the nomination or election of federal

8 candidates. These ads evidenced that the organization's major purpose was federal campaign

9 activity because they "support," "oppose," "praise," or "criticize" the federal candidates. See

10 .ruprn notes 10-16.

11 Likewise, the following ads on which Crossroads GPS spent approximately $67,678,000,

12 though not express advocacy, oppose or criticize federal candidates and therefore provide

13 evidence that Crossroads GPS had as its major purpose the nomination or election of federal

14 candidates.

15 i. Mountain''

16 A balanced budget amendment in Washington would stop the mounting national 17 debt that threatens Wisconsin's economy. Since Tammy Baldwin went to 18 Washington, that debt has grown by $10 trillion. Baldwin said she supported a 19 balanced budget, then voted against a balanced budget amendment. In fact, she 20 voted to raise the debt limit five times. Tell Tammy to stop spending money we 21 don't have and support a balanced budget amendment. Support the New Majority 22 Agenda at NewMajorityAgenda.org. 23

Id. The full communication can be viewed at http://w\vw.livinttroomcandidate.ori»/commercialis/2004/ashlevs-storv.

" httD://www.voutube.com/watch?v=n3VvUIRXlk8. Crossroads GPS spent $250,000 on this ad. http:/Avvvw.cros5roadsgps.ore/20l.2/Q8/crossroads-gps-launches-.second-issue-ad-in^\viscori5ih-fQC»sed-on-rccklcss-Washington-spending/.

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 17 of34

ii. Suffered'®

2 Florida's seniors are facing a health care crisis. Only fourteen physicians to every 3 1,000 Medicare beneficiaries. But in Washington, Bill Nelson's been voting for the 4 new health care law which cuts Medicare spending by $700 billion, puts unelected 5 bureaucrats between Florida's three inillion Medicare recipients and the care they need, 6 hurting Florida's seniors. Tell Senator Nelson it's time to repeal. Support the New 7 Majority Agenda at NewMajorityAgenda.org. 8 9 iii. Get Up"

10 You get up, you work hard, you do the things that matter most. Another day. But 11 today in Washington, America's debt increased 3.5 billion. 3.5 billion every single day 12 since Jon Tester arrived in the U.S. Senate. Why? Tester voted for the trillion-dollar 13 stimulus and the budget-busting health care law. And he's voted six times to raise the 14 debt limit. So another day means more debt for them. Tell Tester: cut the debt. 15 Support the New Majority Agenda at NewMajorityAgenda.org. 16 17 iv. More Martin Spending^"

18 Big Washington spending is not helping New Mexico. And the more money Martin 19 Heinrich is spending is part of the problem. He voted to spend over a trillion dollars on 20 the failed stimulus, like sending almost two million to Califomia to collect ants, almost 21 300,000 to Texas to study weather on Venus. But back in New Mexico, we've lost 22 27,000 jobs. Tell Martin: more money wasted is not the solution. Focus on jobs for 23 New Mexico. Support the New Majority Agenda at NewMajorityAgenda.org. 24 25 V. Channel'

26 Man on couch: "Oh boy. I need to take my mind offthe terrible jobs situation." 27 Man turns on television to a fake movie trailer, which states; "Coming to you this year: 28 the health care takeover. Taxes on Ohio businesses that could kill jobs. Sherrod 29 Brown gives two thumbs up." 30 Man changes the channel to a fake advertisement for music compilation: "Call now 31 and get great hits like 'Where did all the jobs go?' and 'Failed Stimulus.'"

http://www.voutube.coni/watch?v=S2fTu4UHsdI. Crossroads GPS spent a total of $4,200,000 on "Suffered," "Get Up," "More Martin Spending," and "Channel." httD://www.crossroadseps.org/2012/08/crossroads-gps-launches-4-2-million-is5ue-advocacv-DUsh-in-foiir-states/.

httb://w\vw.v.outube.cQm/watch?v= IXFzKsuBmM.

htlp://ww.vv.v6utube.com/watch?v=KH vxDXorcS.

•http://w\v.w.voutube.cbm/vvatch?v=CkUr OPOTnE.

MUR 6596 (Crossroads GPS) General-Counsel's Report Page 18 of 34

1 Man flips channel again to fake news teaser: "Tonight at eleven, how Sherrod Brown's 2 latest vote could mean tax hikes on the small businesses Ohio depends on to create 3 jobs." 4 Man turns off television and sighs, stating: "Tell Sherrod Brown Ohio needs jobs, not 5 more taxes." 6 Narrator: "Support the New Majority Agenda at NewMajorityAgenda.org." 7 8 vi. People Over Govemment^^

9 Who really creates jobs? Small business or big government? Claire McCaskill sides 10 with government. Claire voted repeatedly for higher taxes on nearly half a million job-

1 11 creating Missouri businesses. And Claire's vote for the health care law? Another huge 9 12 tax increase. Meanwhile, Missouri's lost more than 53,000 manufacturing jobs. Tell ^ 13 Claire: stop taxing job creators and start cutting spending. Support the New Majority ^ 14 AgendaatNewMajorityAgenda.org. 4 $ 16 vii. Sense"

2 17 It doesn't make sense. With our economy still struggling, Jon Tester votes.to raise I 18 taxes on Montana families and small businesses. Tester's tax hike could cost hundreds

• 19 dfthousandsofU.S. jobs. And Tester's tax-hiking ways aren't new. He was the 20 deciding vote to pass the health care law, which we now know is a massive middle-21 class tax increase. Tell Tester: stop raising taxes on Montana families and small 22 businesses. Support the New Majority Agenda at NewMajorityAgenda.org. 23 24 viii. Pay Raise^"

25 What's Heidi hiding on taxes? As attorney general, Heitkamp supported new taxes on 26 car insurance and energy, even as she awarded her staff a 30% pay raise and allowed 27 staff to fly a taxpayer-fUnded plane. Now Heitkamp supports higher taxes on North 28 Dakota small businesses, raising taxes on job-creators just as our economy struggles to 29 come back. Tell Heidi: stop supporting higher taxes on small businesses and North 30 Dakota families. Support the New Majority Agenda at NewMajorityAgenda.org. 31

" httD://www.voutube.com/watch?v=r3JDM2vDXYO. Crossroads GPS spent a total of 83,400,000 on "People Over Government," "Sense," "Pay Raise," and "Holes." httD.7ywww.crossroadseDS.org/2012/08/crossroads-BDS-lauhchesTnew-issue-adsHn-lbur-state^rocusing-on-tax-hikes^biggcr-eovemment/.

" httD://www.voutube.com/watch?v=v5oOLkFours.

httD://www.voutube.com/watch?v=FSD6BM7eA s.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 19 of 34

ix. Holes"

2 When Tim Kaine was governor, spending soared, blowing holes in the budget every 3 year. Kaine backed massive tax hikes every year. His reckless spending was followed 4 by devastating cuts to higher education. Tuition costs exploded. In Washington, Kaine 5 pushed the failed stimulus, which wasted even more. Kaine's failed solutions? Tax 6 hikes, wasteiul spending. Tell him: that doesn't create jobs. Push to cut the debt. 7 Support the New Majority Agenda at NewMajorityAgenda.org. 8 9 X. News"

1 10 News clip; "Good evening. This is the worst economic recovery America has ever 9 11 had." (D 12 Narrator: "Forty-one straight months of unemployment over 8%. Almost 4 million j 13 fewer jobs than President Obama predicted. 23 million Americans without full-time 2 14 work. The results ofPresidentObama's failed stimulus policies."

15 News clip: "...the worst economic recovery America has ever had." 16 Narrator: "Tell him: for real job growth, stop spending and cut the debt. Support the 17 NewMajorityAgendaatNewMajorityAgenda.org." 18 19 xi. Tried"

20 News clip: ".. .the weakest job-adding quarter in two years..." 21 Narrator: "It wasn't supposed to be this way. Over three years of crushing 22 unemployment, American manufacturing shrinking again. President Obama's plan? 23 Spend more. He's added four billion in debt every day. The economy's slowing, but 24 our debt keeps growing. Tell him; for real job growth, cut the debt. Support the New 25 Majority Agenda at NewMajorityAgenda.org." 26 27 xii. Voice"

28 Montana said "no" to ObamaCare, but Jon Tester voted "yes." ObamaCare cuts 29 Medicare spending by 500 billion, gives a board of unelected bureaucrats the power to 30 restrict seniors' care, and raises taxes by half a trillion dollars. Instead of listening to

" http://www.voutube.coni/watch?v=ZellSEu06Pg.

" http://www.crossroadsgps.org/2012/07/new-ad-news/. Crossroads GPS spent $11,000,000 on this ad. http://wWw.crossroadsgps:org/20l2/07/crossroads-gps-launchcs-new-tv-issuc-ad-tbcused-on-wor.st-ccohomic-rgcovcr-america-has-ever-had/.

" http://www.crossroadsgps.org/2012/07/new-ad-tried/. Crossroads GPS spent $8,000,000 on "Tried." http://www.crossroad5gps.org/20l2/07/cro5sroads-EPs-launciics-new-tv-issue-ad-on-iobs-and-debt/.

" http://www.voutube.com/watch?v=xKEXcnhm7AM. Crossroads GPS spent a total of $2,500,000 on "Voice," "Show," and "Ants." .Iitlp://www.cro.ssroadsgp.s.org/20l2/07/crossroads-gps-lininches-lhrec-state-issiie-

MUR 6596 (Crossroads GPS) General Counsel's Report Page 20 of 34

1 Montana, Jon Tester supported ObamaCare. In fact, he's voted with Obama 95% of the 2 time. Tell Tester: be Montana's voice in Washington. Repeal ObamaCare. Support 3 the New Majority Agenda at NewMajorityAgenda.org. 4 5 xiii. Show^'

6 It's time to play "Who's the Biggest Supporter of the Obama Agenda in Ohio?" It's 7 Sherrod Brown. Brown backed Obama's agenda a whopping 95% of the time. He 8 voted for budget-busting ObamaCare that adds seven hundred billion to the deficit, for 9 Obama's 453 billion dollar tax increase, and even supported cap-and-trade, which

10 would have cost Ohio over one hundred thousand jobs. Tell Sherrod Brown: for real 11 job growth, stop spending and cut the debt. Support the New Majority Agenda at

9 12 NewMajorityAgenda.org. 0 13 h 14 xiv. Ants^°

15 Narrator: "Tim Kaine left Virginia for Washington and was a cheerleader for massive 16 spending." 17 Clip of Kaine: "The stimulus is working." 18 Narrator: "But it actually wasted money studying ants in Africa." 19 Clip of Kaine: "This stimulus is critically important." 20 Narrator: "Really? How? To upgrade politicians' offices?" 21 Clip of Kaine: "These are investments that will put people to work right away." 22 Narrator: "But it failed miserably. Tell Tim Kaine: for real job growth, stop backing 23 reckless spending. Support the New Majority Agenda at NewMajorityAgenda.org." 24 25 XV. Excuses^'

26 Narrator: "America's jobless rate is still too high. Barack Obama's got lots of excuses 27 for the bad economy." 28 Clips of Obama: ".. .headwinds coming from Europe.."We've had a string of bad 29 luck";"...an earthquake in Japan.."...an Arab Spring..".. .an ATM, you don't go 30 to a bank teller..."; "...some things we could not control.;."; "...go to the airport, and 31 you're using a kiosk..we've been a little bit lazy, I think, over the last couple of 32 decades...."

29

30

httn://www.voutube.com/watch?v=VTsIRsDU40o.

http://www.voutube.coni/watch?v=CXOcQDOgMGY.

http://www.crossroadsgps.ore/2012/07/new-ad-excuses/. Crossroads GPS states that it spent a total of $25,000,000 on "News," "Tried," and "Excuses." http://www.crossroadsgps.org/2012/07/crossroads-gps-launches-new-25m-tv-advocacv-blit2-on-debt-and-iobs/. Because it spent $11,000,000 on "News" and $8,000,000 on "Tried," it evidently spent $6,000,000 on "Excuses."

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 21 of 34

1 Narrator: "But Obama never blames Washington's wild spending and skyrocketing 2 debt. Tell Obama, for real job growth, cut the debt. Support the New Majority Agenda 3 at NewMajorityAgenda.org." 4 5 xvi. Tax^^

6 Narrator: "Heidi Heitkamp promised..." 7 Clip of Heitkamp: "I would never vote to take away a senior's health care or limit 8 anyone's care." 9 Narrator: "But Heidi endorsed ObamaCare, bragging..."

10 Clip of Heitkamp: "It actually is a budget-saver." 11 Narrator: "But ObamaCare raises half a trillion dollars in taxes on Americans. It cuts 12 Medicare spending by 500 billion dollars and gives unelected bureaucrats the power to 13 restrict seniors'care. Tell Heidi: support the repeal of ObamaCare. Support the New 14 Majority Agenda at NewMajorityAgenda.org." 15 16 xvii. Why"

17 Narrator: "Heidi Heitkamp promised..." 18 Clip of Heitkamp: "I would never vote to take away a senior's health care or limit 19 anyone's care." 20 Narrator: "But Heidi endorsed ObamaCare, bragging.. 21 Clip of Heitkamp: "It actually is a budget-saver." 22 Narrator: "ObamaCare cuts Medicare spending by five hundred billion dollars, gives 23 unelected bureaucrats the power to restrict seniors' care, and millions of Americans 24 could actually lose their existing health care. Tell Heidi: support the full repeal of 25 ObamaCare. Support the New Majority Agenda at NewMajorityAgenda.org." 26 27 xviii. Spending^^

28 Senator Claire McCaskill was a key Obama advisor in passing his failed 1.18 trillion 29 dollar stimulus. Claire's vote sent nearly two million dollars to California to collect 30 ants in Africa, 25 million for new chairlifts and snow-making in Vermont, almost 31 300,000 to Texas to study weather — on Venus — while in Missouri, 16,000 have lost

" httD://www.voutube.com/watch?v=BZwiPOG7eEg. Crossroads GPS spent $180,000 on this ad. hltp://www.crossroadsmis.orc/20l2/06/crQS5roads-gp.s-rclaunche5-nortli-dakotaMssuc-ad-alert5-citizens-t6-pbamacare-tax/.

" http://www.voutube.com/watch?v=LEM94pWDBo4. Crossroads GPS spent $180,000 on this ad. • http://www.crossroadsgps.ora/2012/06/cro.ssroads-gps-contiiuie.s-issuc-ads-in-noith-dakota-callina-f6r-action-to-reoeal-obamacare/.

^ http://www.voutube.cotn/watch?v=oid7ouHa3Sc. Crossroads GPS spent a total of $2,000,000 on "Spending," "Change," and "Cheap." http://www.crossroadsap5.org/20l2/06/crossroads-gps-dcmands-action-to-stop-reckless-spending-and-obamacare-in-three-state-ad-blitz/.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 22 of 34

1 their jobs. Tell Claire to help Missouri, stop the reckless spending, cut the debt, and 2 supporttheNewMajorityAgendaatNewMajorityAgenda.org. 3 4 xix. Change^^

5 Narrator: "Heidi Heitkamp supports ObamaCare and predicted..." 6 Clip of Heitkamp: "This bill will change the face of health care." 7 Narrator: "She's right. ObamaCare cuts Medicare spending by 500 billion, gives 8 unelected bureaucrats the power to restrict seniors' care, and now health care costs and 9 premiums are likely to go up. That's not the change we need. Tell Heidi ObamaCare is

10 wrong for North Dakota. Support the New Majority Agenda at 11 NewMajorityAgenda.org." 12 13 XX. Cheap^®

14 Narrator: "It's no surprise Sherrod Brown voted for ObamaCare. He supports 15 Obama's agenda 95% of the time. On ObamaCare, Brown said..." 16 Clip of Brown: "This bill pays for itself, actually reduces the deficit." 17 Narrator: "Actually, it adds 700 billion to the deficit, cuts 500 billion from Medicare 18 spending, adds a new tax on Ohio manufacturers. In Sherrod Brown's Washington, 19 talk is cheap. But in Ohio, it's costing us a fortune. Tell Brown: repeal ObamaCare. 20 Support the New Majority Agenda at NewMajorityAgenda.org." 21 22 xxi. Stopwatch"

23 Narrator: "Why isn't the economy stronger? In the seconds it takes to watch this, our 24 national debt will increase $1.4 million. In 2008, BarackObama said..." 25 Clip of Obama: "We can't mortgage our children's future on a mountain of debt." 26 Narrator: "Now he's adding four billion in debt every day, borrowing from China for 27 his spending. Every second, growing our debt faster than our economy. Tell Obama: 28 stop the spending. Support the New Majority Agenda at NewMajorityAgenda.org." 29 30 xxii. Obama-Claire^®

31 ObamaCare? More like ObamaClaire. Because Senator Claire McCaskill has voted 32 with President Obama 90% of the time, including ObamaCare. Cutting half a trillion in

35

36

httD://www.voutube.com/watch?v=EW3hvhGrT Y.

http://www.voutube.com/watch?v=4crbHaIdJE4.

" http://www.crossroadspDS.org/2012/06/new-ad-stopwatch/. Crossroads GPS spent $7,000,000 on this ad. htip://w.ww.crbssrbadsaps:org/2012/06/crossroad.s-gps-launches^7-milllon-issue-ad-niined-at-econbinv-and-debiA

" http://www.voutube.com/watch?v=5230oAekib8. Crossroads GPS spent $516,000 on this ad. http://www.crossroadsgps.orB/2012/05/crQssr6ads-gp5-airs-nevv-tv-is5ue-ad-about^claire^mccaskill5-suppoil-for-obamacare-2/.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 23 of 34

1 Medicare spending — cuts that could slash benefits for some Medicare enrollees. And 2 a board of unelected bureaucrats with the power to restrict seniors' access to medical 3 care. ObamaClaire brought us ObamaCare, and that's bad medicine for health care. 4 Tell Claire: support the New Majority Agenda. Repeal ObamaCare. Learn more at 5 NewMajorityAgenda.org. 6 7 xxiii. Basketball^'

8 I always loved watching the kids play basketball. I still do, even though things have 9 changed. It's funny. They .can't find jobs to get their careers started, and I can't afford

10 to retire. And now we're all living together again. I supported President Obama 11 because he spoke so beautifully. He promised change, but things changed for the 12 worse. Obama started spending like our credit cards have no limit. His health care law 13 made health insurance even more expensive. We've had stimulus and bailouts. Obama 14 added almost $ 16,000 in debt for every American. How v^ll my kids pay that off when 15 they can't even find jobs? Now Obama wants more spending and taxes. That won't fix 16 things. I had so many hopes. Cutting taxes and debt and creating jobs—^that's the 17 change we need. Tell President Obama to cut the job-killing debt and support the New 18 Majority Agenda at NewMajorityAgenda.org.

3 " .40 20 xxiv. Disturbing

21 Bob Kerrey supported the Wall Street bailout while serving on the board of a company 22 that tried to exploit it. Keney's company tried a bureaucratic ploy to get bailout funds, 23 but the ploy failed. These schemes were called a disturbing trend by an independent 24 watchdog, violating the spirit of the law to jump on the gravy train. For Bailout Bob 25 Kerrey, it's Wall Street ways, not Nebraska values. Tell him: support balanced 26 budgets, not bailouts. 27 28 XXV. Obama's Promise^'

29 Narrator: "President Obama's agenda promised so much." 30 Clip of Obama: "We must help the millions of homeowners who are facing 31 foreclosure." 32 Narrator: "Promise broken. One in five mortgages are still underwater."

" http://www.cro5sroadsgDS.ore/2012/05/our-new-ad-basketball/. Crossroads GPS spent $9,700,000 on this ad. http://www.cr6ssroadsgDS.org/2012/05/crossroads-eDS-laiinches-9-7-million-tv-issue-ad-ba5ketball-to-irame-debate-on-economy-taxes-and-debt/.

http://www.voutube.com/watch?.v=ow5dOMVaaOO. Crossroads GPS spent $260,000 on this ad. liitp.7/www.ci'oiisroadsgDS.org/20i2/05/crossroads-eps-launchcs-new-tv-ad-on-bob-ke]Tevs-suDPt)n-for-ilie-wall-street-bailout/.

httb://www.crossroadsgn5.org/20l2/05/new-ad-obamas-promise/. Crossroads GPS spent $8,000,000 on this ad. iuip://www:crossroad5gps:ore/20l2/05/crossroad5-eps-launches-25-million-tv-ad-iiiilialive-over-next-month-to-frame-debate-on-economv-obamacare-debt/.

i

MUR 6596 (Crossroads GPS) General Counsel's Report Page 24 of 34

1 Clip of Obama: "If you are a fiunily making less than $250,000 a year, you will not see 2 your taxes go up." 3 Narrator: "Broken. ObamaCare raises eighteen different taxes." 4 Clip of Obama: "If you like your health care plan, you'll be able to keep your health 5 care plan." 6 Narrator: "Broken. Millions could lose their health care coverage and could be forced 7 into a government pool." 8 Clip of Obama: "Today I'm pledging to cut the deficit we inherited by half by the end 9 of my first term in office."

10 Narrator: "Broken, because he hasn't even come close. We need solutions, not just 11 promises. Tell President Obama to cut the deficit and support the New Majority 12 Agenda at NewMajorityAgenda.org." 13 14 xxvi. Quote Leadership'^^

15 19,000 jobs lost in Missouri since 2009. 23,000 homes lost to foreclosure in 2011. 16 And what have President Obama and Claire McCaskill been doing? Over a trillion 17 dollars in failed stimulus. Costly ObamaCare, where over a million eligible Missouri 18 seniors could be forced to pay more for their prescription drugs. Tell Senator 19 McCaskill it's time stop supporting Obama's outrageous spending. Say "no" to 20 Obama's proposed trillion dollar deficit. 21 22 xxvii. Way'^^

23 Narrator: "Remember this from Jon Tester?" 24 Clip of Tester: "Washington has lost its way, and we need to set it right." 25 Narrator: "But in Washington, Tester's way is Obama's way. Tester voted with 26 President Obama 97% of the time. Tester voted for Obama's trillion dollar deficits, for 27 cap-and-trade — a massive energy tax — and for budget-busting ObamaCare. Tell Jon 28 Tester: Obama's way is the wrong way for Montana. Tell him to say 'no' to Obama's 29 proposed trillion dollar deficit." 30 31 xxviii. Hole^^

32 Nevada's in a hole. Unemployment's the worst in the country. Housing, too. And 33 what's Shelley Berkley been doing in Washington? Voting for tax hikes that would 34 make it worse. Even Ae largest tax increase in history. She voted for a massive new

" http://www.voutube.coiii/watch?v=PATWzOOPeYO. Crossroads GPS spent a total of SI,200,COG on "Quote Leadership," "Way," "Hole," "Amazing," and "Similarities." httD://ww\v.crossroadsEDS.ore/2012/04/crossroads-&ps-ad-launches-is.sue-ads-in-five-states-taigetinp-reckless-senate-spending-highcr-taxes/.

" http://www.voutube.com/watch?v=xbxODe-BMR4.

^ http://www.voutube.com/watch?v=oMWB kLBNHc.

MUR 6S96 (Crossroads GPS) General Counsel's Report Page2S of 34

1 energy tax that would cost families $1,600 a year. And on spending, Berkley supported 2 a budget that pushed deficits sky high, piling up debt. Tell Shelley Berkley: vote 3 against higher taxes that would cost more j obs. 4 5 xxix. Amazing"*^

6 Narrator: "Do you think Barack Obama has been amazing?" 7 Clip pf Heidi Heitkamp: "I think Barack Obama's going to be amazing, and I think we 8 are on our way to a better United States." 9 Narrator: "Heidi Heitkamp supports ObamaCare, which costs over a trillion dollars,

10 cuts SOO billion in Medicare spending, and gives fifteen unelected bureaucrats the 11 power to restrict seniors' care. Tell Heidi: ObamaCare is not the way to a better 12 United States. Support the repeal of ObamaCare." 13 14 XXX. Similarities'*^

15 Tim Kaine and Barack Obama. One's a former governor, the other is President. Can 16 you spot the similarities? Reckless spending. That's Tim Kaine's billion dollar 17 spending spree. Red ink. Governor Kaine turned a billion dollar surplus into a $3.7 18 billion shortfall. Taxes. Kaine pushed a billion dollar tax hike. Reckless spending, red 19 ink, higher taxes. They have a lot in common. We work hard and save; Obama and 20 Kaine tax and spend. 21 22 xxxi. Too Much'*^

23 News clip: "Under President Obama, domestic oil production is at an eight-year high." 24 Narrator: "Oh really? His own administration admits production's down where 25 Obama's in charge. The real story..." 26 News clip: "A lot of these increases in production went back to Bush-era decisions, 27 and most of them, of course, are on private land. So you're taking credit for this boost 28 in exploration, which is not really fair." 29 Narrator: "Taking credit for others' hard work: typical Washington. No matter how 30 Obama spins it, gas costs too much. Tell Obama: stop blaming others. Work to pass 31 better energy policies." 32

45

46

47

httD://www.crossroad5gps.org/2012/04/1349/.

http://www.voutube.com/watch?"v=NX-2EDVHRxV.

http://www.crossroadsgps.org/2012/04/new-ad-too-much/. Crossroads GPS spent $1,700,000 on this ad. hnp://www.crossroiidsgDS.ora/2012/04/new-crossronds-gps-ad-Dresses-obama-on-ranure-to-keenrgas-prices-low/:

MUR 6596 (Crossroads GPS) General Counsel's Report Page 26 of 34

48 1 xxxii. Deflect (electioneering communication)'

2 Narrator: "Then and now. The difference? President Obama's administration 3 restricted oil production in the Gulf, limited development of American oil shale, and 4 Obama personally lobbied to kill a pipeline bringing oil from Canada. Even now, 5 instead of helping..." 6 News clip; "At the White House for three weeks, the word has been deflector shield on 7 gas prices, put up the deflector shield." 8 Narrator: "The President's playing politics. Tell President Obama: bad energy 9 policies mean energy prices we can't afford."

.10 11 xxxiii. From There^'

12 Here's Claire McCaskill using special interest cash to hide the fact she's voted against 13 what's best for Missouri. Claire claims to protect Medicare? But she voted to cut 14 Medicare spending half a trillion dollars by supporting ObamaCare. Claire claims to 15 cut taxes for the middle class? But she has also voted against extending tax cuts, 16 including the child tax credit, death tax, and marriage penalty. Tell Claire: on 17 Medicare and taxes, start voting in Washington the way you talk in Missouri. 18 19 xxxiv. Balloon^"

20 America's debt is at an all-time high. But for President Obama and Congressman 21 Leonard Boswell, when spending our money, the sky's the limit. Boswell voted for 22 Obama's stimulus bill. $825 billion in wasted spending. They bailed out auto 23 companies for 85 billion. And by supporting ObamaCare, Boswell and Obama upped 24 spending another $700 billion. Tell Congressman Boswell to get his head out of the 25 clouds and stop out of control Washington spending. 26

httD://www.crossroadsgps.org/2012/03/new-ad-deflect-2/. Crossroads GPS spent $650,000 on this ad. http://www.crossr6adsKDS.6rg/20l2/03/crossroads->iPs-launches-new-natiunalTtv-ad-focuscd-'on-obatnas-fai!cd-. energy-policv/. Crossroads GPS reported $118,305 of this total as an electioneering communication. hhP!//images.nictusa.com/Ddf/487/l2970790487/l2970790487.Ddf.

httD://www.voutube.com/watch?v=8gxoOXsi7s8. Crossroads GPS spent $300,000 on this ad. .http://w.ww.crossroadsgps.orQ/20l2/03/crossioads-gps-launches-iv-ad-expbsing-ciaire-inccaskill.s-supDort-of-medicare-cuts-tax-hikes/.

http://www.voutube.com/watch?v=mv098FkOcvs. Crossroads GPS spent $77,000 on this ad. iutp://www.crossroadsgps.org/2012/03/crossroads-gps-iaunches-new-lssue-ad-in-iowa-targeting-lconard-boswells-skv-high-government-spending/.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 27 of 34

1 XXXV. Lemmings and Liberals''

2 Only two creatures on Earth follow their leaders over a cliff: lemmings and 3 Washington liberals. Senator Claire McCaskill followed the President over a cliff 4 with ObamaCare. Trillions in higher debt. Special interest bailouts. Wasted 5 stimulus spending. Now President Obama is forcing religious hospitals and 6 charities to provide services that violate their beliefs. Republicans and Democrats 7 have called on President Obama to withdraw his extreme rule, but Washington 8 insider Claire McCaskill is tone-deaf to the real world. She's defending this 9 ObamaCare mandate, inserting government into our private lives as never before.

10 Senator McCaskill told voters she wanted to be held accountable. Take her at her 11 word. Call Senator McCaskill at 816-421 -1639. Tell her to change her position 12 before she and President Obama destroy freedoms that make America great. 13 14 xxxvi. Every Level (electioneering communication)'^

15 Nanatdr: "Hepromised..." 16 Clip of President Obama: "We're investing in a clean energy economy with the 17 potential to create hundreds of thousands of jobs." 18 Narrator: "Then he gave his political backers billions — a big government fiasco 19 infused with politics at every level. 500 million to Solyndra — now bankrupt. 20 Nearly 100 million to a pet project teetering on default. Laid-off workers: 21 forgotten. Typical Washington. Tell President Obama we need jobs, not more 22 insider deals." 23 24 Crossroads GPS argues in its response that none of the above communications can be

25 classified as express advocacy under either 11 C.F.R. § § 100.22(a) or 100.22(b), or as the

26 functional equivalent of express advocacy under Wisconsin Right to Life, Inc. v. FEC, 551 U.S.

27 449 (2007), and therefore none of them constitute federal campaign activity. Resp. at 9-11;

28 Supp. Resp. at 11. As discussed above, however, that argument fails to come to terms with the

29 Commission's longstanding view — upheld by the courts — that the required major purpose test

30 is not limited solely to express advocacy (or the functional equivalent of express advocacy).

hnD://www.voutube.com/watch?v=Ov5eBX7t6XM. Crossroads GPS spent $65,000 on the ad. http://www:crbssrQadsi'Ps.ore/2012/02/cr()ssroads-eDS-laiinche5-new-radio-ad-taigetinti-claire-mccaskills-tone-deaf-support-for-president-obamas-policies/.

" hiip://w\vw.crossr6adsgps.ore/20l2y02/crossroads-aps-launches-ncw-ad-everv-lcvcl/. Crossroads GPS spent $500,000 on the ad. http://wvvw.crossroadsans.ore/2012/02/crossroads-aps-launchcs-ncw-tv-ad-on-solvndra-fiasco/. Crossroads GPS reported $74,670 of this total as electioneering communications. Form 9 (Feb. 22,2012) ($40,401); Foim 9 (Feb. 23,2012) ($31,218); Form 9 (Feb. 23,2012) ($3,049).

MUR 6596 (Crossroads GPS) General Counsel's Report Page 28 of 34

1 Each of the Crossroads GPS ads features a clearly identified federal candidate, supports or

2 opposes a candidate, and was run in the candidate's respective state or congressional district

3 shortly before a primary or general election. The fact that the ads do not contain express

4 advocacy, or the functional equivalent, does not shield such ads from consideration under the

5 major purpose test.®^

6 Nor does Buckley support an argument that determining an organization's major purpose

@ 7 is limited to consideration of its express advocacy. The Court first established the major purpose

^ . 8 test in the context of its discussion of section 434(e) — a provision that required the disclosure of

4 g 9 expenditures by persons other than political committees. In order to cure vagueness concerns in

2 10 that section, the Court construed "expenditure" to reach only express advocacy. Id. at 79-80. By

" 11 contrast, limiting which expenditures political committees would have to disclose, the Court held

12 that the term "political committee" — as defined in section 431 (4) — "need only encompass

13 organizations that are under the control of a candidate or the major purpose of which is the

14 nomination or election of a candidate." Id. at 79. Thus, the two limitations were imposed on two

15 different terms in two different sections of the Act: (1) "express advocacy" as a limitation on

16 "expenditures" made by persons other than political committees pursuant to section 434(e); and

17 (2) "major purpose" as a limitation on the definition of "political committee" pursuant to section

18 431(4). The opinion could have articulated a test that linked the limitations — requiring, for

19 example, that to be considered a political committee an organization's "major purposed must be

20 to expressly advocate the nomination or election of a candidate." But the Court did not take that

21 tack. Indeed, the Court noted that even "partisan committees" which include "groups within the

" Similarly, the fact that some of the ads contain a tag line requesting that the viewer call the candidate and tell the candidate to take certain action (e.g., "Tell Congressman Boswell to get his head out of the clouds and stop out of control Washington spending.") does not immunize the communications from being considered federal campaign activity when determining major purpose.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 29 of 34

1 control of the candidate or primarily organized for political activities" would fall outside the

2 definition of "political committee" only if they fail to meet the statutory spending threshold. Id.

3 at 80, n. 107 (emphasis added).

4 Similarly, in MCFL, the Court's opinion nowhere suggests that express advocacy

5 communications are the only kind of "campaign activity" that can satisfy the major purpose test.

6 See MCFL, 479 U.S. at 252-53,262 (political committee requirements inapplicable to

7 "organizations whose major purpose is not campaign advocacy," but "political committee" does

8 include organizations with a major purpose of "campaign activity') (emphasis added). And

9 many lower federal courts have likewise decided that a determination of major purpose is not

10 restricted to consideration of a group's express advocacy as compared to its other activities.^^

11 Concerning the time frame under which a group's spending should be considered,

12 Crossroads GPS argues that "political committee status has been judged in the past according to

13 whatever time frame is most appropriate to the case at hand, as opposed to simply applying an

" See North Carolina Right to Life v. Leake, 525 F.3d 274,289 (4th Cir. 2008) (major purpose test may be implemented by examining, inter alia, "if the organization spends the majority of its money on supporting or opposing candidates") (emphasis added); Akins v. FEC, 101 F.3d 731,742 (D.C. Cir. 1997) ("an organization devoted almost entirely to campaign spending could not plead that the administrative burdens associated with such spending were unconstitutional as applied to it") (emphasis added), vacated on other grounds, 524 U.S. 11 (1998); FEC V. Machinists Non-Partisan Political League, 655 F.2d 380, 393 (D.C. Cir. 1981) (recognizing "the grave constitutional difftculties inherent in construing the term 'political committee' to include groups whose activities are not... directly related to promoting or defeating a clearly identified 'candidate' for federal ofhce") (emphasis added); RTAA, 796 F. Supp. 2d 736, 751 (E.D. Va. 2011) (Recognizing that "the FEC considers whether the group spends money extensively on campaign activities such as canvassing or phone banks, or on express advocacy communications" and "the FEC is entitled to consider the full range of an organization's activities in deciding whether it is a political committee"), affirmed by 681 F.3d 544 (4th Cir. June 12,2012); Free Speech v. FEC, 720 F.2d Hi {lOth Cir. 20\2), petition for cert, filed Qio. 13-772). But see New Mexico Youth Organized v. Herrera, 611 F.3d 669,678 (10th Cir. 2010) (interpreting Buckley's major purpose test as establishing that regulation as a political committee is only constitutionally permissible (1) when an organization's central purpose is "campaign or election related"; or (2) when a "preponderance of [the organization's] expenditures is for express advocacy or contributions to candidates."); Statement of Reasons, Comm'rs. Petersen and Hunter at 6, MUR 5842 (Economic Freedom Fund) (interpreting the Court's major purpose requirement to mean that "the Act does not reach those 'engaged purely in issue discussion,' but instead can only reach... 'communications that expressly advocate the election or defeat of a clearly identified candidate'") (citing Buckley, 424 U.S. at 79-80); see also Colo. Right to Life Comm., Inc. v. Cqffman, 498 F.3d 1137,1154 (10th Cir. 2007) (holding a Colorado statute unconstitutional as applied because it "would, as a matter of common sense, operate to encompass a variety of entities based on an expenditure that is insubstantial in relation to their overall budgets").

MUR 6596 (Crossroads GPS) General Counsel's Report Page 30 of 34

1 inflexible or predetermined time frame (such as the full calendar year in which the activity at

2 issue occurred)." Supp. Resp. at 3. Even assuming that is correct, the "most appropriate"

3 timeframe provides little guidance and lacks a footing in the Act, judicial decisions, or

4 Commission precedents. Rather, as the Supplemental E&J stated, settled MURs "provide

5 considerable guidance to all organizations" regarding the application of the major purpose test

6 and "reduce any claim of uncertainty because concrete factual examples of the Committee's

7 political committee analysis are now part of the public record." Supplemental E&J at SS9S,

8 5604. Accordingly, we look to those cases to apply the major purpose test.

9 A calendar year provides the firmest statutory footing for the Commission's major

10 purpose determination — and is consistent with the Act's plain language. The Act defines

11 "political committee" in terms of expenditures made or contributions received "during a

12 calendar year." 2 U,S.C. § 431(4) (emphasis added). Additionally, in Malenick, the court's

13 holding specifically addressed only one calendar year (1996) because that was the only year

14 during which Triad received $1,000 in contributions. 310 F. Supp. 2d 230,237 (D.D.C. 2004)

15 ("Accordingly, because Triad and then Triad Inc.'s major purpose was the nomination or

16 election of specific candidates in 1996, and because Triad received contributions aggregating

17 more than $1,000 in 1996,1 find that Triad and Triad, Inc., operated as a 'political committee' in

18 1996.") (emphasis added); see also GOPAC, 917 F.Supp. 851, 853 (group founded in 1979, yet

19 court discusses major purpose only in 1989 and 1990). That the Malenick decision, which is

20 cited by the 2007 Supplemental E&J, used a calendar year approach confirms that such an

21 approach to major purpose is consistent with both the statutory language and Ruc^/ey's judicial

22 gloss on that language. Such an approach is further reflected in several MURs, including those

23 referenced in the 2007 Supplemental E&J as guidance for the Commission's major purpose test,

MUR 6S96 (Crossroads GPS) General Counsel's Report Page 31 of34

1 in which the Commission only considered groups' spending over the period leading up to an

2 election, an approach that is largely consistent with a calendar year approach "

3 Although no time frame aligns perfectly with every past enforcement action," a calendar

4 , year approach falls squarely within the relevant precedent." Thus, whether Crossroads GPS had

5 the requisite major purpose should be determined by reference to its activities during the 2012

6 calendar year.

See MUR 5492 (Freedom, Inc.) (analyzing group's admitted major purpose in 2004 even though group was formed in 1962); MURs 5577 and 5620 (National Association of Realtors - 527 Fund) (analyzing NAR-S27 Fund's 2004 spending even though group had registered with IRS since 2000); MUR 5755 (New Democrat Network) (analyzing New Democrat Network's 2004 spending while group had existed since at least 1996); MUR 5753 (League of Conservation Voters) (analyzing LCV's 2004 spending even though one of LCV's funds had registered with the IRS as early as 2000); see also MURs 5694,5910 (Americans for Job Security) (analyzing activity irom 2000 through 2006 in determining group's major purpose in 2006, despite the fact that the group was founded in 1997); MUR 5487 (Progress for America VF) (analyzing group's major purpose based on 2004 disbursements where group had raised S4.6 million and spent $11.2 million through 2006). Frequently a group's spending only occurs during the calendar year of an election, forming the sole basis for deciding whether its spending has triggered major purpose. See MURs 5511 and 5525 (Swift Boat Veterans and POWs for Truth) (only activity of group was in 2004); MUR 5541 (November Fund) (only activity of group was in 2004); MUR 5568 (Empower Illinois) (only activity of group was in 2004); MURs 5977 and 6005 (American Leadership Project) (only activity of group was in 2008); MUR 6317 (Utah Defenders of Constitutional Integrity) (only activity of group was in 2010).

The Commission has determined previously that analyzing major purpose on the basis of an entity's fiscal year would be inappropriate, as "neither FECA, as amended, nor any judicial decision interpreting it, has substituted tax status for the conduct-based determination required for political committee status." Supplemental E&J at 5598.

" Some have called OGC's identification of a calendar year as the timefhime for applying the major purpose test an "expansive regulatory sweep" requiring notice and comment rulemaking. Statement of Reasons, Vice Chair McGahn and Comm'rs. Hunter and Petersen at 19, 19 n.64, MUR 6081 (American Issues Project); Statement of Reasons, Chair Goodman and Comm'rs Hunter and Petersen at 23, n.98, MUR 6396 (Crossroads Grassroots Policy Strategies). We disagree. Like all aspects of the major purpose test, the relevant time frame is "a creature of statutory interpretation." See Or. for Individual Freedom v. Madigan, 697 F.3d 464,487 (7th Cir. 2012). Because the definition of political committee under 2 U.S.C. § 431(4)(a) speciftes the calendar year, using the same period to determine major purpose merely implements that statutory choice. It is not a rulemaking under the APA.

In some matters, OGC or the Commission may not have had a complete record about a group's spending and therefore made reference to spending outside of a calendar year. See First Gen. Counsel's Rpt., MURs 5694, 5910 (Americans for Job Security) (stating "we do not know the full scope of AJS's disbursements" but noting allegations that $3.8 million out of $6 million in 2004 spending was on media, while 78% of AJS's activity from 2000 through 2006 was for "political advertising campaign"); Conciliation Agreement, MUR 5487 (Progress for America VF) (analyzing group's major purpose based on 2004 disbursements, 60% of which were spent on nine television advertisements, while noting that the group had also raised $4.6 million and spent $ 11.2 million after the 2004 election through 2006). Nonetheless, the analysis of major purpose specifically referenced the relevant 2004 calendar year spending of those groups. That the Commission acknowledged the facts before it in those cases does not undermine the calendar year approach. To the contrary, as noted, the Commission's analysis in those two MURs tends to support the calendar year approach. .

MUR 6596 (Crossroads GPS) General Counsel's Report Page 32 of 34

* « * *

2 In sum, Crossroads GPS appears to have spent approximately $138,646,864 during 2012

3 on the type of commimications that the Commission considered to be federal campaign activity,

4 and therefore indicative of major purpose, in past enforcement decisions. Crossroads GPS

5 estimates that it spent $188,886,899 during calendar year 2012. Supp. Resp. at 9. Based on the

6 available information, the amount Crossroads GPS spent on federal campaign activity is

7 approximately 73.4 % of Crossroads GPS's total spending for calendar year 2012. As a result,

8 Crossroads GPS's spending shows that the group's major purpose during 2012 was federal

9 campaign activity (i.e., the nomination or election of a federal candidate).^^

10 C. Conclusion 11 12 Crossroads GPS made over $1,000 in expenditures during 2012, and its spending during

13 that calendar year indicates that it had as its major purpose federal campaign activity (i.e., the

14 nomination or election of federal candidates). Accordingly, we recommend that the Commission

15 find reason to believe that Crossroads GPS violated 2 U.S.C. §§ 432,433, and 434, by failing to

16 organize, register, and report as a political committee, and that the Commission authorize an

17 investigation. Although we believe there is sufficient information at this stage to recommend

18 pre-probable cause conciliation based solely on Crossroads GPS's spending for advertisements,

19 as detailed herein, an investigation of Crossroads GPS's additional 2012 activity, including

Crossroads GPS argues that its spending on independent expenditures does not constitute the majority of-its activity when compared to its total spending since its founding in June 2010. Supp. Resp. at 8-9. But major purpose appears to be satisfied even if we were to analyze Crossroads GPS's spending over the organization's entire active life, an approach previously advocated by some Commissioners. See e.g.. Statement of Reasons, Vice Chair McGahn and Comm'rs. Hunter and Petersen at 13-14, MUR 6081 (American Issues Project); Statement of Reasons, Chair Goodman and Comm'rs Hunter and Petersen at 20-25, MUR 6396 (Crossroads Grassroots Policy Strategies). Crossroads GPS estimates that it spent $253,607,413 "over Ae life of the organization (through 2012)." Supp. Resp. at 9. Crossroads GPS's 2012 spending on federal campaign activity thus accounted for 55% of the amount it spent during its entire active life (through 2012). In reaching this conclusion, we do not intend to express the view that a finding of major purpose requires clearance of a 50% threshold, but only that the spending on federal campaign activity in this case is alone sufficient to support a finding of major purpose.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 33 of 34

1 examination of its fundraising solicitations and advocacy mailings, may tiirhish evidence of

2 additional spending on federal campaign activity that will enhance the public record and

3 establish definitively the date by which Crossroads GPS should have registered as a political

4 committee.

5 III. PROPOSED DISCOVERY

6 We plan tO seek information (1) to establish the extent, nature, and Cost of Crossroads

7 GPS's federal campaign activity and (2) to identify potential witnesses who may have relevant

8 knowledge of these facts. We also request that the Conunission authorize the use of compulsory

9 process, including the issuance of appropriate interrogatories, document subpoenas, and

10 deposition subpoenas, as necessary. The information sought through any discovery would be

11 focused on ascertaining the scope of Crossroads GPS's reporting obligations, and would be

12 consistent with the type of information that the Commission seeks in its analysis of a group's

13 requirements as a political committee.

MUR 6596 (Crossroads GPS) General Counsel's Report Page 34 of 34

1 IV. RECOMMENDATIONS

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26

1. Find reason to believe that (Crossroads Grassroots Policy Strategies violated 2 U.S.C. §§ 432,433, and 434.

2. Approve the attached Factual and Legal Analysis.

3. Authorize the use of compulsory process in this matter.

4. Approve the appropriate letters.

Date m

lelA. Petalas Associate General Counsel for Enforcement

William Powers Assistant General Counsel for Enforcement

Attachment: Factual and Legal Analysis

1 FEDERAL ELECTION COMMISSION 2 3 FACTUAL AND LEGAL ANALYSIS 4 5 RESPONDENT: Crossroads Grassroots Policy Strategies MUR: 6596 6 7 I. INTRODUCTION

8 This matter was generated by a complaint filed by Obama for America and the

9 Democratic National Committee. See 2 U.S.C. § 437(g)(a)(l). The complaint alleges that

10 Crossroads Grassroots Policy Strategies ("Crossroads GPS") violated the Federal Election

11 Campaign Act of 1971, as amended, (the "Act") by failing to organize, register, and report as a

12 political committee in 2012. See 2 U.S.C. §§ 432,433, and 434.

13 As discussed below, the Commission finds reason to believe Crossroads GPS violated

14 2 U.S.C. §§ 432,433, and 434, and authorizes an investigation.

15 11. FACTUAL AND LEGAL ANALYSIS

16 A. Facts

17 1. Crossroads GPS

18 Crossroads GPS is a non-profit corporation that was founded on June 1,2010. Resp., Ex.

19 D. It applied for 501 (c)(4) status as a social welfare organization in September 2010; the

20 Internal Revenue Service ("IRS").has yet to act on its application. Crossroads GPS's cmrent

21 officers and directors are Steven Law (President), Steven Duffield (Vice President for Policy),

22 Sally Vastola (Secretary and Board Member), Bobby Burchfield (Chairman), and Jonathan

23 Collegio (Communications Director). See httD://www.crossroadsgos.org/leadershio-team.

24 Crossroads GPS's Articles of Incoiporation state that it "is established primarily to

25 further the common good and general welfare of the citizens of the United States of America."

MUR 6S96 (Crossroads GPS) Factual and Legal Analysis Page 2 of30

1 Resp., Ex. D. Crossroads GPS's 2011 Tax Return, submitted as an attachment to the Response,

2 describes its mission as:

3 Advocat[ing] policy outcomes on pending legislative and regulatory issues 4 such as: health care reform, taxes, spending and deficits. Congressional 5 reform and energy and environment. The purpose of these issue advocacy 6 and grassroots lobbying activities is to promote policies that strengthen the 7 nation's economy, reduce regulation of private sector activity, and restore 8 government to a sound financial footing. 9

10 See Resp., Ex. D; 2011 Tax Return at 1, Schedule O.

11 According to its Articles of Incorporation, to further its stated mission Crossroads GPS

12 "engag[es] in research, education, and communication efforts regarding policy issues of national

13 importance that will impact America's economy and national security in the years ahead."

14 Resp., Ex. D. On its website. Crossroads GPS states that it is "dedicated to holding

15 Washington's feet to the fire on the practical issues that will actually improve our country and

16 our lives." See httD://www.crossroadsgps.org/about. In its Response, Crossroads GPS states that

17 its major purpose is "advancing its policy and legislative agenda through grassroots

18 communications and outreach." Resp. at 9.

19 2. Crossroads GPS's 2012 Activities 20 21 Crossroads GPS estimates that it spent $188,886,899 during calendar year 2012. Supp.

22 Resp. at 9 (Mar. 20,2013). The group reported spending $70,968,864 on independent

23 expenditures in 2012. October 2012 Quarterly Report at 1 (October IS^ 2012) ($20,558,081);

24 Year-End 2012 Report at 1 (January 15,2013) ($50,410,783).' It also reported spending

25 $192,973 on two electioneering communications ("Every Level" and "Deflect"). PEC Form 9 at

' In its Supplemental Response, Crossroads GPS includes only the figure from the Year-End 2012 Report ($30,410,783) in calculating its total independent expenditures for 2012, Supp. Resp. at 9. This report covers only independent expenditures made by Crossroads GPS from October 1 to December 31,2012. Crossroads GPS, however, also reported spending $20,358,08Ion independent expenditures from July 1,2012 to September 30,2012.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 3 of 30

1 1 (February 22,2012) ($40,401); EEC Form 9 at 1 (February 23,2012) ($31,218); EEC Form ?

2 at 1 (February 23,2012 ($3,049); FEC Form 9 at 1 (March 22,2012) ($118,305).

3 Crossroads GPS states that the following 2012 activities furthered its exempt purpose;

4 • Submitting Freedom of Information Act requests and subsequently posting the 5 documents on www.wikicountability.org. 6 7 • Providing "endorsements and policy commentary" on a variety of "regulatory 8 activities, policy proposals, and other current events." 9

10 • Creating two websites for citizens to contact their representatives. 11 12 • Distributing a series of email newsletters ("Issue Directions") to supporters. 13 14 • Giving grants to section 501 (c)(4) organizations for activities consistent with each 15 organization's exempt purpose. 16 17 • Co-hosting policy forums entitled "How Does the Executive Branch's Abuse of 18 Power Threaten Our Economy?" and "ObamaCare: Then and Now." 19 20 • Producing and airing ads that do not contain express advocacy or its functional 21 equivalent, including December 2012 ads^ related to the "fiscal cliff' 22 negotiations. 23 24 Resp., Ex. £; Supp. Resp. at 7. 25 26 Crossroads GPS argues that all of this activity shows that it does not have as its major

27 purpose the nomination or election of federal candidates, and therefore it is not a political

28 committee under the Act and Commission regulations.

^ Crossroads GPS states that "[g]rants are accompanied by a letter of transmittal stating that the funds are to be used only for tax-exempt function purposes of the grantee organization and not to be used in connection with any political or non-exempt activity." Resp., Ex. E.

^ Crossroads GPS spent $300,000 to air "Over" and $240,000 to air "Balanced" during December 2012. hUp.7/www.crQssroadst;ps.org/2QI2/l2/crossroads-eps-launches-new-tv-ad-criiici7.in2-obaina.s-laclc-of-balancc-in-fiscal-cliff-talks/: httn://www.ci-ossroadsgps.orc/20l2/l2/crossroadSrEPS-lnunches-new-i-adio-ads-urging-scnators-to-support-a-truiv-balanced-fiscal-ciiff-Dlan/.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 4 of30

1 B. Analysis

2 1. The Test for Political Committee Status

3 The Act and Commission regulations define a "political committee" as "any committee,

4 club, association or other group of persons which receives contributions aggregating in excess of

5 $ 1,000 during a cialendar year or which makes expenditures aggregating in excess of $ 1,000

6 during a calendar year." 2 U.S.C. § 431(4)(A); 11 C.F.R. § 100.5. In Buckley v. Valeo, 424 U.S.

7 1 (1976), the Supreme Court held that defining political committee status "only in terms of the

8 annual amount of 'contributions' and 'expenditures'" might be overbroad, reaching "groups

9 engaged purely in issue discussion." Id at 79. To cure that infirmity, the Court concluded that

10 the term "political committee" "need only encompass organizations that are under the control of

11 a candidate or the major purpose of which is the nomination or election of a candidate." Id.

12 (emphasis added). Accordingly, under the statute as thus construed, an organization that is not

13 controlled by a candidate must register as a political committee only if (1) it crosses the $ 1,000

14 threshold and (2) it has as its "major purpose" the nomination or election of federal candidates.

15 a. The Commission's Case-By-Case Approach to Major Purpose

16 Although Buckley established the major purpose test, it provided no guidance as to the

17 proper approach to determine an organization's major purpose. See, e.g.. Real Truth About

18 Abortion, Inc. v. FEC, 681 F.3d 544, 556 (4th Cir. 2012), cert, denied, 81 U.S.L.W. 3127 (U.S.

19 Jan. 7,2013) (No. 12-311) ("RTAA"). The Supreme Court's discussion of major purpose in a

20 subsequent opinion; Massachusetts Citizens for Life v. FEC, 479 U.S. 238 (1986) ("MCFL"),

21 was similarly sparse. See id. at 262. In that case, the Court identified an organization's

22 independent spending as a relevant factor in determining an organization's major purpose, but

23 examined the entire record as part of its analysis and did not chart the outer bounds of the test.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 5 of 30

1 Id. Following Buckley and MCFL, lower courts have refined the major purpose test — but only

2 to a limited extent.^ In large measure, the contours of political committee status — and the

3 major purpose test — have been left to the Commission.^

4 Following Buckley, the Commission adopted a policy of determining on a case-by-case

5 basis whether an organization is a political committee, including whether its major purpose is the

6 nomination or election of federal candidates. Political Committee Status, 72 Fed. Reg. 559S

7 (Feb. 7,2007) (Supplemental Explanation and Justification). The Commission has periodically

8 considered proposed rulemakings that would have determined major purpose by reference to a

9 bright-line rule — such as proportional (/. e., 50%) or aggregate threshold amounts spent by an

10 organization on federal campaign activity. But the Commission consistently has declined to

11 adopt such bright-line rules. See Independent Expenditures; Corporate and Labor Organization

12 Expenditures, 57 Fed. Reg. 33,548, 33,558-59 (July 29,1992) (Notice of Proposed Rulemaking);

13 Definition of Political Committee, 66 Fed. Reg. 13,681,13,685-86 (Mar. 7,2001) (Advance

14 Notice of Proposed Rulemaking); see also Summary of Comments and Possible Options on the

15 Advance Notice of Proposed Rulemaking on the Definition of "Political Committee,"

16 Certification (Sept. 27,2001) (voting 6-0 to hold proposed rulemaking in abeyance).

* See FEC v. Machinists Non-Partisan Political League, 6SS F.2(l 380,396 (D.C. Cir. 1981) (stating that political committee "contribution limitations did not apply to... groups whose activities did not support an existing 'candidate'" and finding Commission's subpoena was overly intrusive where directed toward "draft" group lacking a "candidate" to support); FEC v. GOP AC, Inc., 917 F. Supp. 851, 861-62 (D.D.C. 1996) (holding that a group's support of a "farm team" of future potential federal candidates at the state and local level did not make it a political committee under the Act); see also UnityOS v. FEC, 596 F.3d 861, 869 (D.C. Cir. 2010) (concluding that an organization "is not subject to regulation as a political committee unless and until it selects a 'clearly identified' candidate").

^ Like other administrative agencies, the Commission has the inherent authority to interpret its statute flirough a case-by-case approach. See SEC v. Chenery Corp., 332 U.S. 194,202-03 (1947) ("[T]he choice made between proceeding by general rule or by individual... litigation is one that lies primarily in the informed discretion of the administrative agency.").

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 6 of30

1 In 2004, for example, the Commission issued a notice of proposed rulemaking asking

2 whether the agency should adopt a regulatory definition of "political committee." See Political

3 Committee Status, 69 Fed. Reg. 11,736,11,745-49 (Mar. 11,2004) (Notice of Proposed

4 Rulemaking). The Commission declined to adopt a bright-line rule, noting that it had been

5 applying the major purpose test "for many years without additional regulatory definitions," and

6 concluded that "it will continue to do so in the future." See Political Committee Status,

7 Definition of Contribution, and Allocation for Separate Segregated Funds and Nonconnected

8 Committees, 69 Fed. Reg. 68,056,68,064-65 (Nov. 23,2004) (explanation and justification).

9 b. Challenges to the Commission's Major Purpose Test and the 10 Supplemental E&J 11 12 When the Commission's 2004 decision not to adopt a regulatory definition was

13 challenged in litigation, the court rejected plaintiffs' request that the Commission initiate a new

14 rulemaking. Shays v. FEC, 424 F. Supp. 2d 100,117 (D.D.C. 2006) {"Shays 7"). The district

15 court found, however, that the Commission had "failed to present a reasoned explanation for its

16 decision" to engage in case-by-case decision-making, rather than rulemaking, and remanded the

17 case to the Commission to explain its decision. Id. at 116-17.

18 Responding to the remand, the Commission issued a Supplemental Explanation and

19 Justification for its final rules on political committee status to further explain its case-by-case

20 approach and provide the public with additional guidance as to its process for determining

21 political committee status. Political Committee Status, 72 Fed. Reg. 5595 (Feb. 7,2007)

22 ("Supplemental E&J"). The Supplemental E&J explained that "the major purpose doctrine

23 requires fact-intensive analysis of a group's campaign activities compared to its activities

24 unrelated to campaigns." Id. at 5601-02. The Commission concluded that the determination of

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 7 of30

1 an organization's major purpose "requires the flexibility of a case-by-case analysis of an

2 organization's conduct that is incompatible with a one-size fits-all rule," and that "any list of

3 factors developed by the Commission would not likely be exhaustive in any event, as evidenced

. 4 by the multitude of fact patterns at issue in the Commission's enforcement actions considering

5 the political committee status of various entities." Id.

6 To determine an entity's "major purpose," the Commission explained that it considers a

7 group's "overall conduct," including public statements about its mission, organizational

8 documents, government filings {e.g., IRS notices), the proportion of spending related to "federal

9 campaign activity," and the extent to which fundraising solicitations indicate funds raised will be

10 used to support or oppose specific candidates. Id. at SS97, S60S. Among other things, the

11 Commission informed the public that it compares how much of an organization's spending is for

12 ''federal campaign activity" relative to "activities that [a]re not campaign related." Id. at 5601,

13 5605 (emphasis added).

14 To provide the public with additional guidance, the Supplemental E&J referenced

15 enforcement actions on the public record, as well as advisory opinions and filings in civil

16 enforcement cases following the 2004 rulemaking. Id. at 5604-05. The Commission noted that

17 the settlements in several MURs involving section 527 organizations "provide considerable

18 guidance to all organizations" regarding the application of the major purpose test and "reduce

19 any claim of uncertainty because concrete factual examples of the Committee's political

20 committee analysis are now part of the public record." Id. at 5595,5604.

21 After the Commission issued the Supplemental E&J, the Shays I plaintiffs again

22 challenged, under the Administrative Procedure Act, 5 U.S.C. §§ 551-59, the Commission's

23 case-by-case approach to political committee status. The court rejected the challenge, upholding

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 8 of30

1 the Commission's case-by-case approach as an appropriate exercise of the agency's discretion.

2 Shays v. FEC, 511 P. Supp. 2d 19,24 (D.D.C. 2007) CShays IF). The court recognized that "an

3 organization... may engage in many non-electoral activities so that determining its major

4 purpose requires a very close examination of various activities and statements." Id. at 31.

5 Recently, the Fourth Circuit rejected a constitutional challenge to the Commission's case-

6 by-case determination of major purpose. The court upheld the Commission's approach, finding

7 that Buckley "did not mandate a particular methodology for determining an organization's major

8 purpose," and so the Commission was free to make that determination "either through

9 categorical rules or through individualized adjudications." RTAA, 681 F.3d at 556. The court

10 concluded that the Commission's case-by-case approach was "sensible,... consistent with

11 Supreme Court precedent and does not unlawfully deter protected speech." Id. at 558.® The

12 Fourth Circuit concluded that the Supplemental E&J provides "ample guidance as to the criteria

13 the Commission might consider" in determining an organization's political committee status and

14 therefore is not unconstitutionally vague. Id.', see Free Speech v. FEC, 720 F.3d 788 (10th Cir.

' The RTAA court rejected an argument — similar to the one made by Crossroads GPS here — that the major purpose test must be confined to "(1) examining an organization's expenditures to see if campaign-related speech amounts to 50% of all expenditures; or (2) reviewing 'the organization's central purpose revealed by its organic documents.'" RTAA, 681 F.3d at SSS. The Fourth Circuit recognized that determining an organization's major purpose "is inherently a comparative task, and in most instances it will require weighing some of the group's activities against others." Id. at 556; see also Koerber v. FEC, 483 F. Supp. 2d 740 (E.D.N.C. 2008) (denying preliminary relief in challenge to Commission's approach to determining political committee sutus, and noting that "an organization's 'major purpose' is inherently comparative and necessarily requires an understanding of an organization's overall activities, as opposed to its stated purpose"); FEC v. Malenick,2\0 F. Supp. 2d 230,234-37 (D.D.C. 2004) (considering organization's statements in brochures and "fax alerts" sent to potential and actual contributors, as well as its spending influencing federal elections); FEC v. GOPAC, Inc., 917 F. Supp. 851, 859 (D.D.C. 1996) ("The organization's purpose may be evidenced its public statements of its purpose or by other means, such as its expenditures in cash or in kind to or for the benefit of a particular candidate or candidates."); id. at 864,866 (applying a flict-intensive inquiry, including review of organizations' meetings attended by national leaders and organization's "Political Strategy Campaign Plan and Budget," and concluding that organization did not have as its major purpose the election of federal candidates).

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 9 of30

1 2013) (quoting XTAA and upholding Commission's case-by-case method of determining political

2 committee status), petition for cert, filed (No. 13-772).'

3 c. Organizational and Reporting Requirements for Political 4 Committees 5 6 Political committees — commonly known as "PACs" — must comply with certain

7 organizational and reporting requirements set forth in the Act. PACs must register with the

8 Commission, file periodic reports for disclosure to the public, appoint a treasurer who maintains

9 its records, and identify themselves through "disclaimers" on ail of their political advertising, on

10 their websites^ and in mass e-mails. See 2 U.S.C. §§ 432-34; 11 C.F.R. §110.11(a)(l).®

11 In the wake of the Supreme Court's decision in Citizens United v. FEC, 130 S. Ct. 876

12 (2010), which struck down the Act's prohibitions on corporate independent expenditures and

13 electioneering communications, the D.C. Circuit held in SpeechNow that political committees

14 that engage only in independent expenditures are not subject to contribution limits.

15 SpeechNow.org v. FEC, 599 F.3d 686,696 (D.C. Cir. 2010) (:'SpeechNow"). These political

16 committees, often referred to as independent expenditure-only political committees or Super

17 PACs, continue to be subject, however, to the "minimal" reporting requirements of 2 U.S.C.

The Supreme Court's decision in FCC v. Fox Television Stations, Inc. is not to the contrary. See 132 S. Ct. 2307,2317 (2012) ("[A] regulation is not vague because it may at times be difficult to prove an incriminating fact but rather because it is unclear as to what fact must be proved"). In that case, the FCC's indecency standard was held to be vague for lack of notice when it applied a new stricter standard, ex post facto, to the Fox defendants, and when it relied on a single "isolated and ambiguous statement" from a SO-year old administrative decision to support its finding of indecency against the ABC defendants. Id. at 2319. Here, in sharp contrast, the Supplemental E&J — which was issued several years before the conduct at issue — provides extensive guidance on the Commission's approach to major purpose and has withstood both APA and constitutional challenges. See Center for Individual Freedom v. Madigan, 697 F.3d 464 (7th Cir. 2012) {"Madigarl') (rejecting vagueness challenge to the definition of "political committee" in the Illinois campaign finance statute).

' An organization must register as a political committee when it crosses the $ 1,000 threshold and determines, based on the guidance in the Supplemental E&J, that it has the requisite major purpose.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 10 of 30

1 §§ 432,433, and 434(a), and the organizational requirements of 2 U.S.C. §§ 431(4) and 431(8).'

2 Id. at 697. These requirements, which promote disclosure, do not, of course, prohibit speech.

3 ^7)4^681 F.3d at 552 n.3.

4 Notably, the Supreme Court has stressed that such requirements serve the vital role of

5 disclosure in political discourse. See Citizens United, 130 S. Ct. at 916 (recognizing that

6 increased "transparency" resulting irom FECA disclosure requirements "enables the electorate to

7 make informed decisions and give proper weight to different speakers and messages"); Doe v.

8 Reed, 561 U.S. 186,130 S. Ct. 2811,2820 (2010) (holding that public disclosure of state

9 referendum petitions serves important government interest of "promot[ing] transparency and

10 accountability in the electoral process," and "preserving the integrity of the electoral process");

11 see also Doe, 130 S. Ct. at 2837 (Scalia, J., concurring) ("Requiring people to stand up in public

12 for their political acts fosters civic courage, without which democracy is doomed."); Madigan,

13 697 F.3d at 490 (upholding Illinois's campaign finance disclosure provisions against

14 constitutional facial challenge, finding a substantial relation to "Illinois's interest in informing its

15 electorate about who is speaking before an election"). But cf. Minn. Citizens for Life, Inc. v.

16 Swanson, 692 F.3d 864, 876 (8th Cir. 2012) (striking down certain registration and disclosure

17 provisions of Minnesota's campaign finance law, finding that those obligations as applied to

18 associations that do not meet Buckley's "major purpose test" are unduly burdensome and do not

19 match any "sufficiently important disclosure interest").

' Super PACs are also subject to certain source restrictions, such as prohibitions on contributions from foreign nationals (2 U.S.C. § 441e) and federal contractors (2 U.S.C. § 441c).

MUR 6S96 (Crossroads GPS) Factual and Legal Analysis Page 11 of 30

1 2. Application of the Test for Political Comniittee Status to Crossroads GPS

2 a. Statutory Threshold 3 4 To assess whether an organization has made an "expenditure," the Commission "analyzes

5 whether expenditures for any of an organization's communications made independently of a

6 candidate constitute express advocacy either under 11 C.F.R. § 100.22(a), or the broader

7 definition at 11 C.F.R. § 100.22(b)." Supplemental E&J at 5606. Crossroads GPS reported

8 spending $70,968,864 on independent expenditures in 2012. See supra at 5. Thus, Crossroads

9 GPS far exceeded the $1,000 statutory threshold for political committee status. See 2 U.S.C.

10 § 431(4)(A); 11 C.F.R. § 100.5.

11 b. Major Purpose 12 13 Crossroads GPS states in its responses and on its website, and in its tax returns, that its

14 major purpose is not federal campaign activity, but rather "advancing its policy and legislative

15 agenda through grassroots communications and outreach." Resp. at 9; Supp. Resp. at 7-8;

16 http://www.crossroadsgps.org/about/. The Commission noted in the Supplemental E&J that it

17 may consider such statements in its analysis of an organization's major purpose. Supplemental

18 E&J at 5606, but that such statements are not necessarily dispositive. See Real Truth About

19 Obama v. FEC, No. 3:08-cv-00483,2008 WL 4416282, at *14 (E.D. Va. Sept. 24,2008) ("A

20 declaration by the organization that they are not [organized] for an electioneering purpose is not

21 dispositive.") (emphasis in original, alteration added), aff'd, 575 F.3d 342 (4th Cir. 2009),

22 vacated on other grounds, 130 S. Ct. 2371 (2010), remanded and decided, 796 F. Supp. 2d 736,

23 affirmed sub nom. Real Truth About Abortion v. FEC, 681 F.3d 544 (4th Cir. 2012), cert, denied,

24 81 U.S.L.W. 3127 (U.S. Jan. 7.2013) (No. 12-311). Under the Commission's case-by-case

25 approach, the Commission considers the organization's "overall conduct," including its

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 12 of 30

1 disbursements, activities, and statements. Supplemental E&J at SS97. In this case. Crossroads

2 GPS's proportion of spending related to federal campaign activity is alone sufficient to establish

3 that its major purpose in 2012 was the nomination or election of federal candidates.

4 Crossroads GPS reported spending $70,968,864 on independent expenditures in 2012. In

5 addition, as described below, the available information indicates that Crossroads GPS spent at

6 least $67,678,000 in 2012 on communications that support or oppose a clearly identified Federal

7 candidate, but do not contain express advocacy. In past enforcement actions, the Commission

8 has determined that funds spent on communications that support or oppose a clearly identified

9 federal candidate, but do not contain express advocacy, should be considered in determining

10 whether that group has federal campaign activity as its major purpose.'"

11 For example, the Commission has relied, in part, on the following advertisements in

12 determining that an entity was a political committee;

13 • **Chiid's Pay": The advertisement contains "images of children performing 14 labor-intensive jobs: washing dishes in a restaurant kitchen, vacuuming a hotel 15 hallway, working on an assembly line in a factory, collecting garbage, working at 16 an auto repair shop, and checking groceries," and concludes with the question: 17 "Guess who's going to pay off President Bush's $ 1 trillion deficit?"'' 18

" See Conciliation Agreement H IV. 11, MUR 5754 (MoveOn.org Voter Fund) (relying on funds used for advertisements that "opposed" or "criticized" George W. Bush to establish political committee status); Factual and Legal Analysis at 2. MUR 5753 (League of Conservation Voters 527) (finding major purpose satisfied where funds spent on door-to-door and phone bank express advocacy campaign, and also on advertisements "supporting or opposing clearly identified federal candidates, some of which contained express advocacy"); Conciliation Agreement^ IV. 14, MUR 5487 (Progress for America Voter Fund) (concludingthat PFA VF had met the major purpose test after spending 60% of its funds on communications that "praised George W. Bush's leadership as President and/or criticized Senator Kerry's ability to provide similar leadership"); see cdso Stipulation for Entry of Consent Judgment H 22, FEC v. Citizens Club for Growth. Inc., Civ. No. 1:05-01851 (Sept. 6,2007) (entering stipulation of Commission, approved as part of a coiisent Judgment, where organization was treated as a political committee because "the vast majority of [the group's disbursements] were made in connection with federal elections, including, but not liinited to, funding for candidate research, polling, and advertisements and other pubiic communications referencing a clearly identified federal candidate").

" Factual and Legal Analysis at 3-4,12-13, MUR 5754 (MoveOn.Org Voter Fund). The full communication can be viewed at httD://www.voutube.com/watch?v=A9WKimKIvUO.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 13 of30

1 • "70 Billion More": The advertisement shows images of a young boy sitting at a 2 school desk and a young girl with a thermometer in her mouth. The voice-over 3 states: "We could build thousands of new schools, or hire a million new teachers. 4 We could make sure every child has insurance. Instead, George Bush has spent 5 $ 1 SO billion in Iraq and has a secret plan to ask for $70 billion more. But after 6 four years it's now clear: George Bush has no plan for taking care of America. 7 Face it. George Bush is not on our side."'^ 8 9 • "Jobs": "Is George Bush listening to us? Since taking office, he's let oil and

10 energy companies call the shots. Special exemptions from the Clean Water and 11 Clean Air Acts. Halliburton collecting billions in no-bid contracts. Here in 12 Wisconsin, 52,500 manufacturing jobs lost. America is going in the wrong 13 direction. And George Bushjust listens to the special interests."'^ 14 15 • "Yucca You Decide": "Yucca Mountain. While everyone plays politics, who's 16 looking out for Nevada? Eighty-five percent of the nuclear waste could come 17 through Las Vegas. Past businesses. Through communities. By our schools. 18 Accidents happen, and if so, how could Las Vegas, a city and economy built on 19 tourism, recover? Who would come visit us then? The question: did George W. 20 Bush really try and stop Yucca Mountain? Or was he just playing politics?""^ 21 22 • "Finish It": [Onscreen: Images of Mohammed Atta, Osama bin Laden, Khalid 23 Sheik Mohammed, Nick Berg's killers, and victims of terrorist attacks.] "These 24 people want to kill us. They killed hundreds of innocent children in Russia. Two 25 hundred innocent commuters in Spain. And 3,000 innocent Americans. John 26 Kerry has a 30-year record of supporting cuts in defense and intelligence and 27. endlessly changed positions on Iraq. Would you trust Keny against these fanatic 28 killers? President Bush didn't start this war, but he will finish it."'^ 29 30 • "Ashley's Story": This advertisement recounts the story of Ashley Faulkner, 31 whose mother was killed in the September 11,2001, terrorist attacks, and the 32 interaction she had with President George W. Bush during a visit to Ohio. It 33 closes with Ashley Faulkner's father stating: "What I saw was what I want to see

" Id. at 4j 12-13. The full communication can be viewed at http://archive.org/details/movf70billionmore.

" Factual and Legal Analysis at 5,18, MUR 5753 (League of Conservation Voters 527). The full communication can be viewed at http://archive.org/details/lcv lobs 102604.

" Id. at 5,18. The fiill communication' can be viewed at http://archive.org/details/lcv vucca decide.

" Conciliation Agreernent | IV. 14, MUR 5487 (Progress for America Voter Fund). The full communication can be viewed at http.7/www.iivingroomcandidatc.org/commercials/2n04/finish-it.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 14 of 30

1 in the heart and in the soul of the man who sits in the highest elected office in our 2 country."'® 3 4 The Commission found that each of these advertisements — though not express advocacy

5 — indicated that the respondents had as their major purpose the nomination or election of federal

6 candidates. These ads evidenced that the organization's major purpose was federal campaign

7 activity because they "support," "oppose," "praise," or "criticize" the federal candidates. See

8 fupru notes 10-16.

9 Likewise, the following ads on which Crossroads GPS spent approximately $67,678,000,

10 though not express advocacy, oppose or criticize federal candidates and therefore provide

11 evidence that Crossroads GPS had as its major purpose the nomination or election of federal

12 candidates.

13 i. Mountain"

14 A balanced budget amendment in Washington would stop the mounting national 15 debt that threatens Wisconsin's economy. Since Tammy Baldwin went to 16 Washington, that debt has grown by $10 trillion. Baldwin said she supported a 17 balanced budget, then voted against a balanced budget amendment. In fact, she 18 voted to raise the debt limit five times. Tell Tammy to stop spending money we 19 don't have and support a balanced budget amendment. Support the New Majority 20 Agenda at NewMajorityAgenda.org. 21 22 ii. Suffered'®

23 Florida's seniors are facing a health care crisis. Only fourteen physicians to every 24 1,000 Medicare beneflciaries. But in Washington, Bill Nelson's been voting for the

Id. The full communication can be viewed at httD:V/w\Vw.livih[troomcarididate.ori»/commercials/2004/ashlevsrStorv.

" httD://www.voiitube.com/watch?v=n3VvUlRXlk8. Crossroads GPS spent $250,000 on this ad. http://www.crossroadsgps.orE/2012/08/crossroads-gps-launches-second-issue-ad-in-wisconsin-focused-on-reckless-Washington-spending/.

" http://www.voutube.com/watch?v=S2fru4UHsdl. Crossroads GPS spent a total of $4,200,000 on "Suffered," "Get Up," "More Martin Spending," and "Channel." http://www.crossroadsEPs.org^O 12/08/crossroads-gps-launches-4-2-million-issue-advocacv-push-in-four-states/.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 15 of 30

1 new health care law which cuts Medicare spending by $700 billion, puts unelected 2 bureaucrats between Florida's three million Medicare recipients and the care they need, 3 hurting Florida's seniors. Tell Senator Nelson it's time to repeal. Support the New 4 Majority Agenda at NewMajorityAgenda.org. 5 6 iii. Get Up"

7 You get up, you work hard, you do the things that matter most. Another day. But 8 today in Washington, America's debt increased 3.5 billion. 3.5 billion every single day 9 since Jon Tester arrived in the U.S. Senate. Why? Tester voted for the trillion-dollar

10 stimulus and the budget-busting health care law. And he's voted six times to raise the 11 debt limit. So another day means more debt for them. Tell Tester; cut the debt. 12 Support the New Majority Agenda at NewMajorityAgenda.org. 13 14 iv. More Martin Spending^"

15 Big Washington spending is not helping New Mexico. And the more money Martin 16 Heinrich is spending is part of the problem. He voted to spend over a trillion dollars on 17 the failed stimulus, like sending almost two million to Califomia to collect ants, almost 18 300,000 to Texas to study weather on Venus. But back in New Mexico, we've lost 19 27,000 jobs. Tell Martin: more money wasted is not the solution. Focus on jobs for 20 New Mexico. Support the New Majority Agenda at NewMajorityAgenda.org. 21 22 V. Channel'

23 Man on couch: "Oh boy. I need to take my mind off the terrible jobs situation." 24. Man turns on television to a fake movie trailer, which states: "Coming to you this year: 25 the health care takeover. Taxes on Ohio businesses that could kill jobs. Sherrod 26 Brown gives two thumbs up." 27 Man changes the channel to a fake advertisement for music compilation: "Call now 28 and get great hits like 'Where did all the jobs go?' and 'Failed Stimulus.'" 29 Man flips channel again to fake news teaser: "Tonight at eleven, how Sherrod Brown's 30 latest vote could mean tax hikes on the small businesses Ohio depends on to create 31 jobs." 32 Man turns off television and sighs, stating: "Tell Sherrod Brown Ohio needs jobs, not 33 more taxes." 34 Narrator: "Support the New Majority Agenda at NewMajorityAgenda.org." 35

20

21

htlD://www.voiiiiibe.com/watch?v= IXFzKsuBmM.

httb.//www.voumbe.com/watch?v=KII vxDXnreS.

http://www.voutube.com/watch?v=CkUr OPOTnE.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 16 of 30

1 vi. People Over Government^^

2 Who really creates jobs? Small business or big government? Claire McCaskill sides 3 with government. Claire voted repeatedly for higher taxes on nearly half a million job-4 creating Missouri businesses. And Claire's vote for the health care law? Another huge 5 tax increase. Meanwhile, Missouri's lost more than 53,000 manufacturing jobs. Tell 6 Claire: stop taxing job creators and start cutting spending. Support the New Majority 7 Agenda at NewMajorityAgenda.org. 8 9 vii. Sense^^

10 It doesn't make sense. With our economy still struggling, Jon Tester votes to raise 11 taxes on Montana families and small businesses. Tester's tax hike could cost hundreds 12 of thousands of U.S. jobs. And Tester's tax-hiking ways aren't new. He was the 13 deciding vote to pass the health care law, which we now know is a massive middle-14 class tax increase. Tell Tester: stop raising taxes on Montana families and small 15 businesses. Support the New Majority Agenda at NewMajorityAgenda.org. 16 17 viii. PayRaise^"

18 What's Heidi hiding on taxes? As attorney general, Heitkamp supported new taxes on 19 car insurance and energy, even as she awarded her staff a 30% pay raise and allowed 20 staff to fly a taxpayer-funded plane. Now Heitkamp supports higher taxes on North 21 Dakota small businesses, raising taxes on job-creators just as our economy struggles to 22 come back. Tell Heidi: stop supporting higher taxes on small businesses and North 23 Dakota families. Support the New Majority Agenda at NewMajorityAgenda.org. 24 25 ix. Holes"

26 When Tim Kaine was govemor, spending soared, blowing holes in the budget every 27 year. Kaine backed massive tax hikes every year. His reckless spending was followed 28 by devastating cuts to higher education. Tuition costs exploded. In Washington, Kaine 29 pushed the failed stimulus, which wasted even more. Kaine's failed solutions? tax 30 hikes, wasteful spending. Tell him: that doesn't create jobs. Push to cut the debt. 31 SupporttheNewMajorityAgendaatNewMajorityAgenda.org. 32

" http://www.voutube.comywatch?v=r3JDM2vDXYO. Crossroads GPS spent a total of $3,400,000 on "People Over Government," "Sense," "Pay Raise," and "Holes." http://wwvy.crossroadsgps.ore/2012/08/crossroads-gps-launchesrncw-issue-ads-in-fdiir-statetociising-on-iax-hikes-bieeer-govemmeni/.

http://www.voutubc.com/watch?v=v5oOLkFours.

" ' http://www.voutube.com/watch?v=FSp6BM7eA s.

" http://www.YOUtube.cotn/watch?v=ZellSEu06PR.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 17 of30

1 X. News"

2 News clip: "Good evening. This is the worst economic recovery America has ever 3 had." 4 Narrator: "Forty-one straight months of unemployment over 8%. Almost 4 million 5 fewer jobs than President Obama predicted. 23 million Americans without full-time 6 work. The results of President Ohama's failed stimulus policies." 7 News clip: ".. .the worst economic recovery America has ever had." 8 Narrator: "Tell him: for.real job growth, stop spending and cut the debt. Support the 9 New Majority Agenda at NewMajorityAgenda.org."

10 11 xi. Tried"

12 News clip: ".. .the weakest job-adding quarter in two years..." 13 Narrator: "It wasn't supposed to be this way. Over three years of crushing 14 unemployment, American manufacturing sluinking again. President Ghama's plan? 15 Spend more. He's added four billion in debt every day. The economy's slowing, but 16 our debt keeps growing. Tell him: for real job growth, cut the debt. Support the New 17 Majority Agenda at NewMajorityAgenda.org." 18 19 xii. Voice"

20 Montana said "no" to ObamaCare, but Jon Tester voted "yes." ObamaCare cuts 21 Medicare spending by 500 billion, gives a board of unelected bureaucrats the power to 22 restrict seniors' care, and raises taxes by half a trillion dollars. Instead of listening to 23 Montana, Jon Tester supported ObamaCare. In fact, he's voted with Obama 95% of the 24 time. Tell Tester: be Montana's voice in Washington. Repeal ObamaCare. Support 25 the New Majority Agenda at NewMajorityAgenda.org. 26 27 xiii. Show^'

28 It's time to play "Who's the Biggest Supporter of the Obama Agenda in Ohio?" It's 29 Sherrod Brown. Brown backed-Obama's agenda a whopping 95% of the time. He

2C http://www.crossroadsgD5.org/2012/07/new-ad-news/. Crossroads GPS spent $11,000,000 on this ad. hilp://www:crossroadsiiDs.org/20l2/07/crossroads-gps-launches-new-tv-issuc-ad-rocused-on-worst-ccononiic-recover-america-has-ever-had/.

" httD://www.crossroadsgps.org/2012/07/new-ad-tried/. Crossroads GPS spent $8,000,000 on'Tried." http://www.crossroadsgps.org/20l2/07/crbssroads-gps-lnunchcs-new-tv-issuc-ad-oii-iobs-and-debl/.

" http://www.voutube.coni/watch?v=xKEXcnhni7AM. Crossroads GPS spent a total of $2,500,000 on "Voice," "Show," and "Ants." http://www.crossroadsgps.org/20l2/07/Cro.ssroadsrgps-launches-three-state-issue-advocacv-push/.

^ http://www.voutube.com/watch?v=VTslRspU40o.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 18 of30

1 voted for budget-busting ObamaCare that adds seven hundred billion to the deficit, for 2 Obama's 453 billion dollar tax increase, and even supported cap-and-trade, which 3 would have cost Ohio over one hundred thousand jobs. Tell Sherrod Brown: for real 4 job growth, stop spending and cut the debt. Support the New Majority Agenda at 5 NewMajorityAgenda.org. 6 7 xiv. Ants^°

8 Narrator: "Tim Kaine left Virginia for Washington and was a cheerleader for massive 9 spending."

10 Clip of Kaine: "The stimulus is working." 11 Narrator: "But it actually wasted money studying ants in Africa." 12 Clip of Kaine: "This stimulus is critically important." 13 Narrator: "Really? How? To upgrade politicians'offices?" 14 Clip of Kaine: "These are investments that will put people to work right away." 15 Narrator: "But it failed miserably. Tell Tim Kaine: for real job growth, stop backing 16 reckless spending. Support the New Majority Agenda at NewMajorityAgenda.org." 17 18 XV. Excuses^'

19 Narrator: "America's jobless rate is still too high. Barack Obama's got lots of excuses 20 for the bad economy." 21 Clips of Obama: ".. .headwinds coming from Europe..."We've had a string of bad 22 luck"; "...an earthquake in Japan..."; "...an Arab Spring..."; "...an ATM, you don't go 23 to a bank teller..".. .some things we could not control..".. .go to the airport, and 24 you're using a kiosk..".. .we've been a little bit lazy, I think, over the last couple of 25 decades...." 26 Narrator: "But Obama never blames Washington's wild spending and skyrocketing 27 debt. Tell Obama, for real job growth, cut the debt. Support the New Majority Agenda 28 at NewMajorityAgenda.org." 29 30 xvi. . Tax^^

31 NarraW: "Heidi Heitkamp promised..."

30

3

http://www.voutube.com/watch?v=CXOcODOgMGV.

http://www.crossroadsgDs.org/2012/07/new-ad-excuses/. Crossroads GPS states that it spent a total of $25,000,000 on "News," "Tried," and "Excuses." http.7/www.crossroadsgDs.org/2012/07/crossroads-gDS-launches-new-25m-tv-advocacv-blitz-on-debt-and-iobs/. Because it spent S11,000,000 on "News" and $8,000,000 on "Tried," it evidently spent $6,000,000 on "Excuses."

" http://www.voutube.com/watch?v=BZwiPOG7eEg. Crossroads GPS spent $180,000 on this ad. http://www:crbssroadsgplorg/20l2/06/crossr6ads-;gps-relaunches-norlh-dakotarissue-ad-alerts-citizens-to-obamacare-tax/.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 19 of 30

1 Clip of Heitkamp: "I would never vote to take away a senior's health care or limit 2 anyone's care." 3 Narrator: "But Heidi endorsed ObamaCare, bragging..." 4 Clip of Heitkamp: "It actually is a budget-saver." 5 Narrator: "But ObamaCare raises half a trillion dollars in taxes on Americans. It cuts 6 Medicare spending by SCO billion dollars and gives unelected bureaucrats the power to 7 restrict seniors' care. Tell Heidi: support the repeal of ObamaCare. Support the New 8 Majority Agenda at NewMajorityAgenda.org." 9

10 xvii. Why"

11 Narrator: "Heidi Heitkamp promised..." 12 Clip of Heitkamp: "I would never vote to take away a senior's health care or limit 13 anyone's care." 14 Narrator: "But Heidi endorsed ObamaCare, bragging..." 15 Clip of Heitkamp: "It actually is a budget-saver." 16 Narrator: "ObamaCare cuts Medicare spending by five hundred billion dollars, gives 17 unelected bureaucrats the power to restrict seniors' care, and millions of Americans 18 could actually lose their existing health care.. Tell Heidi: support the full repeal of 19 ObamaCare. Support the New Majority Agenda at NewMajorityAgenda.org." 20 21 xviii. Spending^''

22 Senator Claire McCaskill was a key Obama advisor in passing his failed 1.18 trillion 23 dollar stimulus. Claire's vote sent nearly two million dollars to California to collect 24 ants in Africa, 25 million for new chairlifls and snow-making in Vermont, almost 25 300,000 to Texas to study weather — on Venus — while in Missouri, 16,000 have lost 26 their jobs. Tell Claire to help Missouri, stop the reckless spending, cut the debt, and 27 support the New Majority Agenda at NewMajorityAgenda.org. 28 29 xix. Change"

30 Narrator: "Heidi Heitkamp supports ObamaCare and predicted..." 31 Clip of Heitkamp: "This bill will change the face of health care." 32 Narrator: "She's right. ObamaCare cuts Medicare spending by 500 billion, gives 33 unelected bureaucrats the power to restrict seniors' care, and now health care costs and

" httD://www.voutube.coin/watch?v=LEM94DWpBo4. Crossroads GPS spent SI80,000 on this ad. hltn://www.crossroadsiiLDS.ore/20l2/06/crossroads-gps-continues-issne-ads-in-northrdakota-caliine-ror-action-lo-repeal-obamacare/.

" http://www.voutube.com/watch?v=oid7guHa3Sc. Crossroads GPS spent a total of $2,000,000 on "Spending," "Change," and "Cheap." htlp://www.crossrbadsEPS.ore/20l2/06/crossroads-gDS-demands-action-to-stOD-reckiess-spending-and-obamacare-in-three-state-ad-biitz/.

" http://www.voutube.com/watch?v=EW3hvhGrT Y.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 20 of 30

1 premiums are likely to go up. That's not the change we need. Tell Heidi ObamaCare is 2 wrong for North Dakota. Support the New Majority Agenda at 3 NewMajorityAgenda.org." 4 5 XX. Cheap^®

6 Narrator: "It's no surprise Sherrod Brown voted for ObamaCare. He supports 7 Obama's agenda 95% of the time. On ObamaCare, Brown said..." 8 Clip of Brown: "This bill pays for itself, actually reduces the deficit." 9 Narrator: "Actually, it adds 700 billion to the deficit, cuts 500 billion from Medicare

10 spending, adds a new tax on Ohio manufacturers. In Sherrod Brown's Washington, 11 t^k is cheap. But in Ohio, it's costing us a fortune. Tell Brown: repeal ObamaCare. 12 Support the New Majority Agenda at NewMajorityAgenda.org." 13 14 xxi. Stopwatch^'

15 Narrator: "Why isn't the economy stronger? In the seconds it takes to watch this, our 16 national debt will increase $ 1.4 million. In 2008, Barack Obama said..." 17 Clip of Obama: "We can't mortgage our children's future on a mountain of debt." 18 Narrator: "Now he's adding four billion in debt every day, borrowing from China for 19 his spending. Every second, growing our debt faster than our economy. Tell Obama: 20 stop the spending. Support the New Majority Agenda at NewMajorityAgenda.org." 21 22 xxii. Obama-Claire^*

23 ObamaCare? More like ObamaClaire. Because Senator Claire McCaskill has voted 24 with President Obama 90% of the time, including ObamaCare. Cutting half a trillion in 25 Medicare spending — cuts that could slash benefits for some Medicare enrollees. And 26 a board of unelected bureaucrats with the power to restrict seniors' access to medical 27 care. ObamaClaire brought us ObamaCare, and that's bad medicine for health care. 28 Tell Claire: support the New Majority Agenda. Repeal ObamaCare. Learn more at 29 NewMajorityAgenda.org. 30

36

37

httD://www.voutube.coin/watch?v=4crbHaIdJE4.

http://www.crossroadsros.ore/2012/06/new-ad-stopwatch/. Crossroads GPS spent $7,000,000 on this ad. htlp://www:crossroadsgps.org/20l2/06/crossi6ads-gps-launches-7Mnillioh-issnc-ad-aimcd-at-economv-and-dcbl/.

" http://www.voutube.com/watch?v=5230oAekib8. Crossroads GPS spent $516,000 on this ad. htip://www.ciossroadsePS.or{!/20l2/05/crossroad5-eps-airs-new-tv-issiie-ad-about-claire-niccaskill.s-siippoi-t-For-obamacare-2/.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 21 of30

1 xxiii. Basketball^^

2 I always loved watching the kids play basketball. I still do, even though things have 3 changed. It's funny. They can't findjobs to get their careers started, and I can't afford 4 to retire. And now we're all living together again. I supported President Obama 5 because he spoke so beautifully. He promised change, but things changed for the 6 worse. Obama started spending like our credit cards have no limit. His health care law 7 made health insurance even more expensive. We've had stimulus and bailouts. Obama 8 added almost $ 16,000 in debt for every American. How will my kids pay that off when 9 they can't even find jobs? Now Obama wants more spending and taxes. That won't fix

10 things. I had so many hopes. Cutting taxes and debt and creating Jobs—^that's the 11 change we need. Tell President Obama to cut the job-killing debt and support the New 12 Majority Agenda at NewMajorityAgenda.org. 13 14 xxiv. Disturbing""

15 Bob Kerrey supported the Wall Street bailout while serving on the board of a company 16 that tried to exploit it. Kerrey's company tried a bureaucratic ploy to get bailout funds, 17 but the ploy failed. These schemes were called a disturbing trend by an independent 18 watchdog, violating the spirit of the law to jump on the gravy train. For Bailout Bob 19 . Kerrey, it's Wall Street ways, not Nebraska values. Tell him: support balanced 20 budgets, not bailouts. 21 22 XXV. Obama's Promise"'

23 Narrator: "President Obama's agenda promised so much." 24 Clip of Obama: "We must help the millions of homeowners who are facing 25 foreclosure." 26 Nanator: "Promise broken. One in five mortgages are still underwater." 27 Clip of Obama: "If you are a family making less than $250,000 a year, you will not see 28 your taxes go up." 29 Narrator: "Broken. ObamaCare raises eighteen different taxes." 30 Clip of Obama: "If you like your health care plan, you'll be able to keep your health 31 care plan."

" http://www.crossroadsgDs.ore/2012/05/our-new-ad-basketball/. Crossroads GPS spent $9,700,000 on this ad. httD://www.crossroadsgDS.ort!/2012/05/crossroads-gus-iaunclies-9-7-million-tv-i5Suc-ad-basketbail-to-franic-debate-on-economy-taxes-and-debt/.

http://www.voutube.com/watch?v=ow5dOMYaqOO. Crossroads GPS spent $260,000 on this ad. lutp://ww.w.crossroadseps.ore/20l2/05/crossroads-eDS-launchcs-ncw-tv-ad-on-bob-kerrevs-suDDoit-for-the-wall-street-bailout/.

http://www.crossroadsgps.org/2012/OS/new-ad-obanias-proniise/. Crossroads GPS spent $8,000,000 on this ad. hllp://www.crossroad5gps.ore/20:i2/0S/crossroads-eps-launches-2S-inillion-lv-ad-initiative-over-next-month-to-frame-debate-on-economv-obamacare-debt/.

MUR 6S96 (Crossroads GPS) Factual and Legal Analysis Page 22 of 30

1 Narrator: "Broken. Millions could lose their health care coverage and could be forced 2 into a government pool." 3 Clip of Obama: "Today I'm pledging to cut the deficit we inherited by half by the end 4 of my first term in office." 5 Narrator: "Broken, because he hasn't even come close. We need solutions, not just 6 promises. Tell President Obama to cut the deficit and support the New Majority 7 Agenda at NewMajorityAgenda.org." 8 9 xxvi. Quote Leadership''^

10 19,000 jobs lost in Missouri since 2009. 23,000 homes lost to foreclosure in 2011. 11 And what have President Obama and Claire McCaskill been doing? Over a trillion 12 dollars in failed stimulus. Costly ObamaCare, where over a million eligible Missouri 13 seniors could be forced to pay more for their prescription drugs. Tell Senator 14 McCaskill it's time stop supporting Obama's outrageous spending. Say "no" to 15 Obama's proposed trillion dollar deficit. 16 17 xxvii. Way"^

18 Narrator: "Remember this from Jon Tester?" 19 Clip of Tester: "Washington has lost its way, and we need to set it right." 20 Narrator: "But in Washington, Tester's way is Obama's way. Tester voted with 21 President Obama 97% of the time. Tester voted for Obama's trillion dollar deficits, for 22 cap-and-trade — a massive energy tax — and for budget-busting ObamaCare. Tell Jon 23 Tester: Obama's way is the wrong way for Montana. Tell him to say 'no' to Obama's 24 proposed trillion dollar deficit." 25 26 xxviii. Hole^

27 Nevada's in a hole. Unemployment's the worst in the country. Housing, too. And 28 what's Shelley Berkley been doing in Washington? Voting for tax hikes that would 29 make it worse. Even the largest tax increase in history. She voted for a massive new 30 energy tax that would cost families $ 1,600 a year. And on spending, Berkley supported 31 a budget that pushed deficits sky high, piling up debt. Tell Shelley Berkley: vote 32 against higher taxes that would cost more jobs. 33

httD://www.voutube.com/watch?v=PATWzOOPeYO. Crossroads GPS spent a total of $1,200,000 on "Quote Leadership," "Way," "Hole," "Amazing," and "Similarities." http://w\vw.crossrbadsgps.orc/20l2/04/crossroads-aDs-ad-launchesrissue-ads-in-five-states-taraetmg-reckless-senate-spending-higher-taxes/.

httP://www.voutube.com/watch?v=xbxODe-BMR4.

** http://www.voutube.com/watch?v=oMWB kLBNHc.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 23 of 30

1 xxix. Amazing^®

2 Narrator: "Do you think Barack Obama has been amazing?" 3 Clip of Heidi Heitkamp: "I think Barack Obama's going to be amazing, and I think we 4 are on our way to a better United States." 5 Narrator: "Heidi Heitkamp supports ObamaCare, which costs over a trillion dollars, 6 cuts 500 billion in Medicare spending, and gives fifteen unelected bureaucrats the 7 power to restrict seniors' care. Tell Heidi: ObamaCare is not the way to a better 8 United States. Support the repeal of ObamaCare." 9

10 XXX. Similarities^®

11 Tim Kaine and Barack Obama. One's a former governor, the other is President. Can 12 you spot the similarities? Reckless spending. That's Tim Kaine's billion dollar 13 spending spree. Red ink. Governor Kaine turned a billion dollar surplus into a $3.7 14 billion shortfall. Taxes. Kaine pushed a billion dollar tax hike. Reckless spending, red 15 ink, higher taxes. They have a lot in conunon. We work hard and save; Obama and 16 Kaine tax and spend. 17 18 xxxi. Too Much"'

19 News clip: "Under President Obama, domestic oil production is at an eight-year high." 20 Narrator: "Oh really? His own administration admits production's down where 21 Obama's in charge. The real story..." 22 News clip: "A lot of these increases in production went back to Bush-era decisions, 23 and most of them, of course, are on private land. So you're taking credit for this boost 24 in exploration, which is not really fair." 25 Narrator: 'Taking credit for others' hard work: typical Washington. No matter how 26 Obama spins it, gas costs too much. Tell Obama: stop blaming others. Work to pass 27 better energy policies." 28

43

46

httD://www.crossroadsgns.org/2012/04/1349/.

http://ww.w; voutube.coin/watch?v=NX-2EDV H Rx V.

Iutp://www:crossroadsans.ort!?20r2/04/ncw-ad-too-muclt/. Crossroads GPS spent $ 1,700,000 on this ad. luiD:/Avww.crossroadsaDS.orc/20l2/04/iiew-cro.ssroads-gps-ad-prcsses-obama-on-faiUire-to-keep-i»asTDrices-low/.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 24 of 30

,48 1 xxxii. Deflect (electioneering communicationy

2 Narrator; "Then and now. The difference? President Obama's administration 3 restricted oil production in the Gulf, limited development of American oil shale, and 4 Ohama personally lobbied to kill a pipeline bringing oil from Canada. Even now, 5 ' instead of helping..." 6 News clip: "At the White House for three weeks, the word has been deflector shield on 7 gas prices, put up the deflector shield." 8 Narrator: "The President's playing politics. Tell President Obama: bad energy 9 policies mean energy prices we can't afford."

10 11 xxxiii. From There^'

12 Here's Claire McCaskill using special interest cash to hide the fact she's voted against 13 what's best for Missouri. Claire claims to protect Medicare? But she voted to cut 14 Medicare spending half a trillion dollars by supporting ObamaCare. Claire claims to 15 cut taxes for the middle class? But she has also voted against extending tax cuts, 16 including the child tax credit, death tax, and marriage penalty. Tell Claire: on 17 Medicare and taxes, start voting in Washington the way you talk in Missouri. 18 19 xxxiv. Balloon"

20 America's debt is at an all-time high. But for President Obama and Congressman 21 Leonard Boswell, when spending our money, the sky's the limit. Boswell voted for 22 Obama's stimulus bill. $825 billion in wasted spending. They bailed out auto 23 companies for 85 billion. And by supporting ObamaCare, Boswell and Obama upped 24 spending another $700 billion. Tell Congressman Boswell to get his head out of the 25 clouds and stop out of control Washington spending. 26

httD://www.crossroadsgps.org/201.2/03/new-ad-deflect-2/. Crossroads GPS spent S650,000 on this ad. hup://vvww.(irossroadsups.org/20l2/03/crossronds-gps-.launchcs-new-natidrinl-tv-ad-fociised-on-obainas-failed-energy-policv/. Crossroads GPS reported $118,305 of this total as an electioneering communication. http://images.niciusii.cuin/pdf/487/l2970790487/l2970790487.pdF.

http://www.voutube.com/watch?v=8gxoOXsi7s8. Crossroads GPS spent $300,000 on this ad. http://w.ww.crossroadsgps.ore/20l2/03/crossroad5-gps-!aunches-tv-ad-cxposine-clairc-mccaskiils-support-oF-medicare-cuts-tax-hikes/.

" http://www.voutube.com/watch?v=mv098FkOcvs. Crossroads GPS spent $77,000 on this ad. http://www.crbssroadsgps.org/2012/03/crossroads-gns-launches-new-issue-ad-in-iowa-tarEeting-leonard-boswcils-skv-high-government-spendine/.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 25 of 30

1 XXXV. Lemmings and Liberals^'

2 Only two creatures on Earth follow their leaders over a cliff; lemmings and 3 Washington liberals. Senator Claire McCaskill followed the President over a cliff 4 with ObamaCare. Trillions in higher debt. Special interest bailouts. Wasted 5 stimulus spending. Now President Obama is forcing religious hospitals and 6 charities to provide services that violate their beliefs. Republicans and Democrats 7 have called on President Obama to withdraw his extreme rule, but Washington 8 insider Claire McCaskill is tone-deaf to the real world. She's defending this 9 ObamaCare mandate, inserting government into our private lives as never before.

10 Senator McCaskill told voters she wanted to be held accountable. Take her at her 11 word. Call Senator McCaskill at 816-421-1639. Tell her to change her position 12 before she and President Obama destroy freedoms that make America great. 13 14 xxxvi. Every Level (electioneering communication)"

15 Narrator: "He promised..." 16 Clip of President Obama: "We're investing in a clean energy economy with the 17 potential to create hundreds of thousands of jobs." 18 Narrator: "Then he gave his political backers billions — a big government fiasco 19 infused with politics at every level. 500 million to Solyndra — now bankrupt. 20 Nearly 100 million to a pet project teetering on default. Laid-off workers: 21 forgotten. Typical Washington. Tell President Obama we need jobs, not more 22 insider deals." 23 24 Crossroads GPS argues in its response that none of the above communications can be

25 classified as express advocacy under either 11 C.F.R. §§ 100.22(a) or 100.22(b), or as the

26 functional equivalent of express advocacy under Wisconsin Right to Life, Inc. v. FEC, 551 U.S.

27 449 (2007), and therefore none of them constitute federal campaign activity. Resp. at 9-11;

28 Supp. Resp. at 11. As discussed above, however, that argument fails to come to terms with the

29 Commission's longstanding view — upheld by the courts — that the required major purpose test

30 is not limited solely to express advocacy (or the functional equivalent of express advocacy).

" http://www.voutube.com/watch?v=Ov5eBX7t6XM. Crossroads GPS spent $65,000 on the ad. hiip://www.crossroadsgD!i.org/20l2/02/crossroadSTaps-launches-ricw-radio-ad-lareetinit-clairc-niccaskills-tone-dear-support-for-president-obamas-policies/.

hitD://vvw\v.cros5roadsgns.ort!/20l2/02/crossroads-epSrlnunches-new-ad-everv-lcvel/. Crossroads GPS spent $500,000 on the ad. Iutp://w.ww:crossmadseps.ort!/20l2/02/crbssroads-eps-launches-new-iv-ad-on-5olvndra-Fiasco/. Crossroads GPS reported $74,670 of this total as electioneering communications. Form 9 (Feb. 22,2012) ($40,401); Form 9 (Feb. 23,2012) ($31,218); Form 9 (Feb. 23,2012) ($3,049).

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 26 of 30

1 Each of the Crossroads GPS ads features a clearly identified federal candidate, supports or

2 opposes a candidate, and was run in the candidate's respective state or congressional district

3 shortly before a primary or general election. The fact that the ads do not contain express

4 advocacy, or the functional equivalent, does not shield such ads from consideration under the

5 major purpose test.^^

6 Nor does Buckley support an argument that determining an organization's major purpose

7 is limited to consideration of its express advocacy. The Court first established the major purpose

8 test in the context of its discussion of section 434(e) — a provision that required the disclosure of

9 expenditures by persons other than political committees. In order to cure vagueness concerns in

10 that section, the Court construed "expenditure" to reach only express advocacy, /rf. at 79-80. By

11 contrast, limiting which expenditures political committees would have to disclose, the Court held

12 that the term "political committee" — as defined in section 431 (4) — "need only encompass

13 organizations that are under the control of a candidate or the major purpose of which is the

14 nomination or election of a candidate." Id. at 79. Thus, the two limitations were imposed on two

15 different terms in two different sections of the Act: (1) "express advocacy" as a limitation on

16 "expenditures" made by persons other than political committees pursuant to section 434(e); and

17 (2) "major purpose" as a limitation on the definition of "political committee" pursuant to section

18 431(4). The opinion could have articulated a test that linked the limitations — requiring, for

19 example, that to be considered a political committee an organization's "major purposed must be

20 to expressly advocate the nomination or election of a candidate." But the Court did not take that

21 tack. Indeed, the Court noted that even "partisan committees," which include "groups within the

" Similarly, the fact that some of the ads contain a tag line requesting that the viewer call the candidate and tell the candidate to take certain action (e.g., "Tell Congressman Boswell to get his head out of the clouds and stop out of control Washington spending.") does not immunize the communications from being considered federal campaign activity when determining major purpose.

I

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 27 of 30

1 control of the candidate or primarily organized for political activities" would fall outside the

2 definition of "political committee" only if they fail to meet the statutory spending threshold. Id.

3 at 80, n. 107 (emphasis added).

4 Similarly, in MCFL, the Court's opinion nowhere suggests that express advocacy

5 communications are the only kind of "campaign activity" that can satisfy the major piupose test.

6 See MCFL, 479 U.S. at 252-53, 262 (political committee requirements inapplicable to

7 "organizations whose major purpose is not campaign advocacy f but "political committee" does

8 include organizations with a major purpose of "campaign activity") (emphasis added). And

9 many lower federal courts have likewise decided that a determination of major purpose is not

10 restricted to consideration of a group's express advocacy as compared to its other activities.^^

11 Concerning the time frame under which a group's spending should be considered,

12 Crossroads GPS argues that "political committee status has been judged in the past according to

13 whatever time frame is most appropriate to the case at hand, as opposed to simply applying an

" See North Carolina Right to Life v. Leake, 525 F.3d 274,289 (4th Cir. 2008) (major purpose test may be implemented by examining, inter alia, "if the organization spends the majority of its money on supporting or opposing candidates") (emphasis added); Akins v. FEC, 101 F.3d 731,742 (D.C. Cir. 1997) ("an organization devoted almost entirely to campaign spending could not plead that the administrative burdens associated with such spending were unconstitutional as applied to it") (emphasis added), vacated on other grounds, 524 U.S. 11 (1998); FEC V. Machinists Non-Partisan Political League, 655 F.2d 380,393 (D.C. Cir. 1981) (recognizing "the grave constitutional difficulties inherent in construing the term 'political committee' to include groups whose activities are not... directly related to promoting or defeating a clearly identified 'candidate' for federal office") (emphasis added); RTAA, 796 F. Supp. 2d 736, 751 (E.D. Va. 2011) (Recognizing that "the FEC considers whether the group spends money extensively on campaign activities such as canvassing or phone banks, or on express advocacy communications" and "the FEC is entitled to consider the full range of an organization's activities in deciding whether it is a political committee"), affirmed by6%\ F.3d 544 (4th Cir. June 12,2012); Free Speech v. FEC, 720 F.3d 788 (10th Cir. 2013), petition for cert, filed (No. 13-772). But see New Mexico Youth Organized v. Herrera, 611 F.3d 669,678 (10th Cir. 2010) (interpreting Buckle's major purpose test as establishing that regulation as a political committee is only constitutionally permissible (1) when an organization's central purpose is "campaign or election related"; or (2) when a "preponderance of [the organization's] expenditures is for express advocacy or contributions to candidates."); Statement of Reasons, Comm'rs. Petersen and Hunter at 6, MUR 5842 (Economic Freedom Fund) (interpreting the Court's major purpose requirement to mean that "the Act does not reach those 'engaged purely in issue discussion,' but instead can only reach... 'communications that expressly advocate the election or defeat of a clearly identified candidate'") (citing Buckley, 424 U.S. at 79-80); see also Colo. Right to Life Comm.. Inc. v. Cqffman, 498 F.3d 1137, 1154 (10th Cir. 2007) (holding a Colorado statute unconstitutional as applied because it "would, as a matter of common sense, operate to encompass a variety of entities based on an expenditure that is insubstantial in relation to their overall budgets").

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MUR 6396 (Crossroads GPS) Factual and Legal Analysis Page 28 of 30

inflexible or predetermined time frame (such as the full calendar year in which the activity at

issue occurred)." Supp. Resp. at 3. Even assuming that is correct, the "most appropriate"

timeframe provides little guidance and lacks a footing in the Act, judicial decisions, or

Cotnmission precedents. Rather, as the Supplemental E&J stated, settled MURs "provide

considerable guidance to all organizations" regarding the application of the major purpose test

and "reduce any claim of uncertainty because concrete factual examples of the Committee's

political committee analysis are now part of the public record." Supplemental E&J at 5595,

5604. Accordingly, we look to those cases to apply the major purpose test.

A calendar year provides the firmest statutory footing for the Commission's major

purpose determination — and is consistent with the Act's plain language. The Act defines

"political committee" in terms of expenditures made or contributions received "during a

calendar year " 2 U.S.C. § 431(4) (emphasis added). Additionally, in Malenick, the court's

holding specifically addressed only one calendar year (1996) because that was the only year

during which Triad received $1,000 in contributions. 310 F. Supp. 2d 230,237 (D.D.C. 2004)

("Accordingly, because Triad and then Triad Inc.'s major purpose was the nomination or

election of specific candidates in 1996, and because Triad received contributions aggregating

more than $1,000 in 1996,1 find that Triad and Triad, Inc., operated as a 'political committee' in

1996.") (emphasis added); see also GOP AC, 917 F.Supp. 851,853 (group founded in 1979, yet

court discusses major purpose only in 1989 and 1990). That the Malenick decision, which is

cited by the 2007 Supplemental E&J, used a calendar year approach confirms that such an

approach to major purpose is consistent with both the statutory language and Buckleys judicial

gloss on that language. Such an approach is further reflected in several MURs, including those

referenced in the 2007 Supplemental E&J as guidance for the Commission's major purpose test.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 29 of 30

1 in which the Commission only considered groups' spending over the period leading up to an

2 election, an approach that is largely consistent with a calendar year approach.^^

3 Although no time frame aligns perfectly with every past enforcement action," a calendar

4 year approach falls squarely within the relevant precedent" Thus, whether Crossroads GPS had

5 the requisite major purpose should be determined by reference to its activities during the 2012

6 calendar year.

7 • ii< * •

" See MUR 5492 (Freedom, Inc.) (analyzing group's admitted major purpose in 2004 even though group was formed in 1962); MURs 5577 and 5620 (National Association of Realtors - 527 Fund) (analyzing NAR-527 Fund's 2004 spending even though group had registered with IRS since 2000); MUR 5755 (New Democrat Network) (analyzing New Democrat Network's 2004 spending while group had existed since at least 1996); MUR 5753 (League of Conservation Voters) (analyzing LCV's 2004 spending even though one of LCV's funds had registered with the IRS as early as 2000); see also MURs 5694, 5910 (Americans for Job Security) (analyzing activity from 2000 through 2006 in determining group's major purpose in 2006, despite the fact that the group was founded in 1997); MUR 5487 (Progress for America VF) (analyzing group's major purpose based on 2004 disbursements where group had raised $4.6 million and spent $11.2 million through 2006). Frequently a group's spending only occurs during the calendar year of an election, forming the sole basis for deciding whether its spending has triggered major purpose. See MURs 5511 and 5525 (Swift Boat Veterans and POWs for Truth) (only activity of group was in 2004); MUR 5541 (November Fund) (only activity of group was in 2004); MUR 5568 (Empower Illinois) (only activity of group was in 2004); MURs 5977 and 6005 (American Leadership Project) (pnly activity of group was in 2008); MUR 6317 (Utah Defenders of Constitutional Integrity) (only activity of group was in 2010).

" The Commission has determined previously that analyzing major purpose on the basis of an entity's fiscal year would be inappropriate, as "neitlier FECA, as amended, nor any judicial decision interpreting it, has substituted tax status for the conduct-based determination required for political committee status." Supplemental E&J at 5598.

" The identification of a calendar year as the timeframe for applying the major purpose test, like all aspects of the major purpose test, is "a creature of statutory interpretation." See Ctr.for Individual. Freedom v. Madigan, 697 F.3d 464,487 (7th Cir. 2012). Because the definition of political committee under2 U.S.C. § 431(4)(a) specifies the calendar year, using the same period to determine major purpose merely implements that statutory choice. It is not a rulemaking under the APA.

In some matters, OGC or the Commission may not have had a complete record about a group's spending and therefore made reference to spending outside of a calendar year. See First Gen. Counsel's Rpt., MURs 5694, 5910 (Americans for Job Security) (stating "we do not know the full scope of AJS's disbursements" but noting allegations that $3.8 million out of $6 million in 2004 spending was on media, while 78% of AJS's activity from 2000 through 2006 was for "political advertising campaign"); Conciliation Agreement, MUR 5487 (Progress for America VF) (analyzing group's major purpose based on 2004 disbursements, 60% of which were spent on nine television advertisements, while noting that the group had also raised $4.6 million and spent $I 1.2 million after the 2004 election through 2006). Nonetheless, the analysis of major purpose specifically referenced the relevant 2004 calendar year spending of those groups. That the Commission acknowledged the facts before it in those cases does not undermine the calendar year approach. To the contraiy, as noted, the Commission's analysis in those two MURs tends to support the calendar year approach.

MUR 6596 (Crossroads GPS) Factual and Legal Analysis Page 30 of 30

1 In sum, Crossroads GPS appears to have spent approximately $138,646,864 during 2012

2 on the type of communications that the Commission considered to be federal campaign activity,

3 and therefore indicative of major purpose, in past enforcement decisions. Crossroads GPS

4 estimates that it spent $188,886,899 during calendar year 2012. Supp. Resp. at 9. Based on the

5 available information, the amount Crossroads GPS spent on federal campaign activity is

6 approximately 73.4 % of Crossroads GPS's total spending for calendar year 2012. As a result,

7 Crossroads GPS's spending shows that the group's major purpose during 2012 was federal

8 campaign activity (/. e., the nomination or election of a federal candidate).^*

9 C. Conclusion 10 11 Crossroads GPS made over $ 1,000 in expenditures during 2012, and its spending during

12 that calendar year indicates that it had as its major purpose federal campaign activity (i.e., the

13 nomination or election of federal candidates). Accordingly, the Commission finds reason to

14 believe that Crossroads GPS violated 2 U.S.C. §§ 432,433, and 434, by failing to organize,

15 register, and report as a political committee, and authorizes an investigation.

16

Crossroads GPS argues that its spending on independent expenditures does not constitute the majority of its activity when compared to its total spending since its founding in June 2010. Supp. Resp. at 8-9. But major purpose appears to be satisfied even if we were to analyze Crossroads GPS's spending over the organization's entire active life. Crossroads GPS estimates that it spent $253,607,413 "over the life of the organization (through 2012)." Supp. Resp. at 9. Grossruads GPS's 2012 spending oh tederal carhpaign activity thus accounted for 55% of the amount it spent duriiig its entire active life (Ihrpugli 2012). In reaching this conclusion, we do not intend to express the view that a finding of major purpose requires clearance of a 50% threshold, but only that the spending on federal campaign activity in this case is alone sufficient to support a finding of major purpose.